Obama welcomes Paulson plan to buy equity in firms

PHILADELPHIA, Oct 10 (Reuters) - U.S. presidential candidate Barack Obama on Friday welcomed a plan by Treasury Secretary Henry Paulson to buy equity in financial institutions if necessary to halt market turmoil.

"There are many causes of this economic crisis, and it's critical that we respond using all the tools that we currently have," Obama said in a statement.

"That's why I support Secretary Paulson's latest initiative to use the authority we gave him in the financial rescue plan to provide more capital to our financial institutions so that they have money to lend to families and businesses," the Illinois Democratic senator added.

Paulson said the program aims to encourage the raising of new private capital to complement the public capital injections. It would use authority created by the $700 billion financial rescue package that Congress passed last week. (Reporting by Caren Bohan; Editing by Eric Walsh)