Washington - The US government seized control of Fannie Mae and Freddie Mac Sunday, seeking to deflect the rising threat of mortgage defaults to the two companies that manage about half of the US home loan market.

US President George W Bush indicated the urgency of the situation, saying that the takeover would "prevent a disruption of our financial system."

The Federal Housing Financing Agency (FHFA) is taking over Fannie and Freddie under a so-called conservatorship and replacing their chief executives and eliminating their dividends.

The newly appointed Governor of the Reserve Bank of India Governor, D. Subbarao said that he will continue the fiscal reform processes in the financial sector of the country.

He said that he would try his best to tame the ever increasing inflation rate in India. He termed it his top priority. He expressed these views after taking the charge of the central bank. He is appointed as 22nd Governor of the central bank for 3 years duration. He was working as Finance Secretary in the Union Ministry of Finance before is elevation.

Washington - The US government was preparing to take over the twin mortgage finance giants known as Fannie Mae and Freddie Mac, dismiss their top executives and prop up the companies with government funds, with an announcement likely as early as Sunday.

The US Treasury has plans to put Fannie and Freddie into a so- called conservatorship, House Financial Services Committee Chairman Barney Frank told Bloomberg financial news agency, after a briefing by Treasury Secretary Henry Paulson on Saturday.

Berlin - Commerzbank Chief Executive Martin Blessing has defended the price Germany's second-largest bank paid to take over rival Dresdner in an interview published by Der Spiegel news magazine on Saturday.

Blessing described the 9.8 billion euros (14.4 billion dollars) paid to insurer Allianz as "not cheap but fair" highlighting the fact that much of the deal had been done with Commerzbank shares.

In addition, the new bank aimed to realize synergies worth 5 billion euros, he said.

On Thursday, report on Currency and Finance by Apex bank was released, which revealed that banks would need Rs 5,70,000 crore to finance their expansion in the next five years. The public sector would require two thirds of capital that comes up to Rs 3,70,000 crore.Thus on Thursday, Reserve Bank of India (RBI) informed that 20 public sector banks will experience an adverse effect on their growth, since Govt. holds a majority stake in these banks.

The Reserve Bank of India maintained that the hike in the salaries of the government employees will put burden on the finance of the union government.

The government has cleared the recommendations of the sixth pay commission recently that cause increase in the salaries of the employees by 21 per cent.

RBI said that the subsidies and farmer loan waiver have also pressurized the state finance. The central bank indicted that it would continue to tighten the monetary policy despite some ease in the inflation rate.