Treasury Secretary Henry Paulson signalled yesterday the U.S. Treasury is considering investing in U.S. banks as the next step in trying to resolve the deepening credit crisis. The recently passed $700 bln bailout bill gives The Treasury the authority to inject cash directly into banks that request it. Such a move would quickly strengthen bank’s balance sheets, and officials hope, persuade them to resume lending. In return the law gives the Treasury the right to take ownership positions in banks, including healthy ones. The prospect of such a move is helping improve sentiment, which is in turn helping drive EUR/JPY higher.