INSTANT VIEW: U.S. to plow cash into weakened banks

NEW YORK (Reuters) - The U.S. Treasury Department on Tuesday unveiled a plan to inject $250 billion into beleaguered U.S. banks to beat back a credit crisis that threatens to swamp the economy.

KEY POINTS: * U.S. Treasury says to buy up to $250 billion in senior preferred, nonvoting shares in financial institutions * Treasury says maximum purchase amount will be $25 billion per institution * Treasury sets deadline of Nov 14 for banks to participate in equity purchase program * Treasury says preferred shares to pay 5 percent a year for first 5 years, 9 percent after 5 years * Treasury says firms in program must adopt Treasury's standards executive pay, corporate governance * Treasury says for firms in program, compensation for top executives won't be tax deductible above $500,000

COMMENTS:

RICHARD GOODMAN, CHIEF FINANCIAL OFFICER, PEPSI, PURCHASE, NEW

YORK:

"The (commercial paper) market is obviously a volatile one, so it's just something we need to stay on top of. Obviously like everybody else we're hoping that the stabilization of the banking system and interbank lending will help enormously to stabilize the financial situation."

"I think that stabilizing the banking system and restoring confidence is critical to stabilizing the financial markets. The issue here is flow of funds and making sure that the funds that are available -- and there are a lot of people and institutions with money to invest -- that they feel confident in being able to put that money into the places that then can loan it out. I'm hopeful that the coordinated global response will work."

DAVID RESLER, CHIEF ECONOMIST, NOMURA SECURITIES, NEW YORK:

"Clearly the markets are relieved by these actions and see them as a way of ensuring the financial system doesn't collapse in of itself.

"There was a growing realization even if the TARP plan worked as it was hoped it would, and even if you did get price discovery, that it wasn't going to be implement fast enough to have this full effect.

"Everybody in these markets had come to the realization you needed to have something radical to restore trust and confidence among banks. Many of the banks weren't real keen on taking this capital infusion from the government, but they recognized it had to be all or none.

"The goal here is to give confidence in one another... I think we're going to find it has the desired effect.

"We're in a period of economic stagnation and contraction, it's probably going to last another few months and into next year, but at the same time this is happening we should be a little encouraged by the drop of oil prices we've had recently."

SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR &

ASSOCIATES, TORONTO:

"The plan continues the investment objectives that were continued elsewhere, especially the recapitalization of financial institutions and the easing of the credit freeze. I think a major fear people had was that this would become political, but because it is a global move there is clearly no political agenda.