An exclusive report from the Wall Street Journal says the U.S. government is weighing options on a far-reaching plan that would be the most extensive government intervention into the financial system seen so far.

One dramatic step would be to guarantee billions of dollars in bank debt; the other plan is to temporarily insure all U.S. bank deposits.

The model for the action is the UK's recently announced plan that it is now pitching to the G-7 members, to guarantee up to £250 billion ($432 billion) in bank debt maturing up to 36 months, according the Journal. "The British concept to expand its proposal to other countries has a lot of support from Wall Street and is being pored over by U.S. officials, according to people familiar with the matter," the article said.

The U.S. plan - "aimed at preventing a further exodus of cash from financial institutions" - is only in discussion stages. And U.S. officials downplayed expectations of any announcement this weekend, the Journal said.

"But as the crisis deepens and stocks continue to tumble, pressure is building on the Bush administration to find a solution that goes beyond the $700 billion financial rescue plan recently signed into law," the Journal said. "Having the government back bank lending would effectively entail the U.S. being the backstop for the country's financial system."

By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008