US Senate urged to back revised bank rescue plan

NEW YORK/BRUSSELS – The US Senate prepared to vote last night on a revised US$700 billion plan aimed at halting the worst financial crisis since the Great Depression.

European policymakers urged the US Congress forward, and the chief executive of Germany’s Deutsche Bank said Europe should be prepared to take similar steps. The Senate vote follows a stunning defeat for the bill in the US House of Representatives on Monday.Lawmakers revised the package in talks on Tuesday to increase to US$250 000 from US$100 000 the limit on individual bank deposits guaranteed by the government.The change was intended to appeal to Republicans who voted against the bailout plan on Monday.The rescue package would allow the Treasury to buy toxic mortgage-related assets from banks to unfreeze credit markets and arrest the crisis, which has toppled Wall Street firms, frozen lending among banks, and overshadowed campaigning for the US presidential election on November 4.The US stock market roared back on Tuesday after the bill’s defeat in the House sent it plunging the day before.Asian and European markets began the final quarter of 2008 on an upbeat note yesterday, but US stock futures fell, indicating US stocks would open lower.”Blind faith doesn’t work this time after Monday’s disappointment,” said Andre Bahkos, president of Princeton Financial Group in Princeton, New Jersey.”People are cautious and they lack confidence that a bailout plan will be a one-step solution.It won’t be.”EURO ZONE Jean-Claude Juncker, chairman of the euro zone’s finance ministers, said the United States had to adopt the plan, a view echoed by Russian finance minister Alexei Kudrin.”It is the responsibility of the United States to other countries,” Kudrin said.The chief executive of Germany’s Deutsche Bank said Europe should look at a US-style rescue.”If the United States passes such a package, Europe should be prepared to find similar solutions,” Josef Ackermann told reporters.If the Senate passes the bill, it must still be approved by the House.Rep.John Boehner, the top Republican in the House, believes the changes in the Senate version of the bill will appeal to Republicans who blocked it on Monday, a spokesman said.Republicans who voted against it cited complaints from their constituents that taxpayers were being asked to bail out Wall Street.After stock markets fell on Monday, cutting the value of retirement plans for millions of Americans, those complaints turned to support for the package, according to members of Congress cited in news reports.And some of the biggest US companies, including Verizon Communications Inc, Microsoft Corp and General Electric Co, put pressure on Congress to act, The Wall Street Journal reported.Both US presidential candidates have also urged lawmakers to get the amended package passed.Nampa-ReutersThe Senate vote follows a stunning defeat for the bill in the US House of Representatives on Monday.Lawmakers revised the package in talks on Tuesday to increase to US$250 000 from US$100 000 the limit on individual bank deposits guaranteed by the government.The change was intended to appeal to Republicans who voted against the bailout plan on Monday.The rescue package would allow the Treasury to buy toxic mortgage-related assets from banks to unfreeze credit markets and arrest the crisis, which has toppled Wall Street firms, frozen lending among banks, and overshadowed campaigning for the US presidential election on November 4.The US stock market roared back on Tuesday after the bill’s defeat in the House sent it plunging the day before.Asian and European markets began the final quarter of 2008 on an upbeat note yesterday, but US stock futures fell, indicating US stocks would open lower.”Blind faith doesn’t work this time after Monday’s disappointment,” said Andre Bahkos, president of Princeton Financial Group in Princeton, New Jersey.”People are cautious and they lack confidence that a bailout plan will be a one-step solution.It won’t be.”EURO ZONE Jean-Claude Juncker, chairman of the euro zone’s finance ministers, said the United States had to adopt the plan, a view echoed by Russian finance minister Alexei Kudrin.”It is the responsibility of the United States to other countries,” Kudrin said.The chief executive of Germany’s Deutsche Bank said Europe should look at a US-style rescue.”If the United States passes such a package, Europe should be prepared to find similar solutions,” Josef Ackermann told reporters.If the Senate passes the bill, it must still be approved by the House.Rep.John Boehner, the top Republican in the House, believes the changes in the Senate version of the bill will appeal to Republicans who blocked it on Monday, a spokesman said.Republicans who voted against it cited complaints from their constituents that taxpayers were being asked to bail out Wall Street.After stock markets fell on Monday, cutting the value of retirement plans for millions of Americans, those complaints turned to support for the package, according to members of Congress cited in news reports.And some of the biggest US companies, including Verizon Communications Inc, Microsoft Corp and General Electric Co, put pressure on Congress to act, The Wall Street Journal reported.Both US presidential candidates have also urged lawmakers to get the amended package passed.Nampa-Reuters