US ‘agrees Wall Street bail-out’


The Bush administration stepped in after weeks of financial turbulence

A leading US senator says both parties in Congress have reached agreement on the outline of a $700bn (£380bn) bail-out plan to revive the finance sector.

Christopher Dodd, chairman of the Senate Banking Committee said they had reached “fundamental agreement” on the principles of a deal.

Republicans and Democrats have been worried about who will fund the plan.

US President George W Bush is meeting presidential candidates John McCain and Barack Obama to discuss the bail-out.

Mr Dodd said Congress could act in the next few days to pass a bill on the subject.

“We look forward to reviewing the proposal. Our focus remains the same – ensuring that the final package is effective,” said Treasury spokeswoman Jennifer Zuccarelli.

After Mr Dodd’s comments Tony Fratto, the White House deputy press secretary, said it was a “a good sign that progress is being made.”

We now expect that we will have a plan that can pass the House, pass the Senate and be signed by the president

Republican Senator Robert Bennett of Utah

The plan, as it was first proposed last week, would broadly help finance firms offload bad debt, which has triggered a global credit crisis.

“We now expect that we will have a plan that can pass the House, pass the Senate and be signed by the president,” Senator Robert Bennett of Utah said after meetings with lawmakers on Thursday.

Details of the package were not immediately available but it is tipped to include restrictions on executives’ pay as well as oversight requirements.

The benchmark Dow Jones index continued to rise after Senator Dodd’s comments, adding 3%, to 11,128.7.


The bail-out has been under scrutiny with politicians on both sides nervous about the deal being rushed through too quickly.

Of particular concern has been the issue of pay for the bosses of the firms in question, as well as concerns over the cost of the plan to the US taxpayer.

But both US Federal Reserve head Ben Bernanke and Mr Bush have warned that without a deal, it would cause a significant set-back to the economy as a whole.

Those in favour of the deal have argued that:

  • The deal would boost global financial stability
  • Increase investor confidence
  • Prevent a global slowdown
  • Encourage banks to lend to each other, and beat the credit crunch.

Those with reservations have said the bail-out would:

  • Cost the taxpayer too much money
  • Benefit bosses of firms who have taken huge risks
  • Increase state debt
  • Give too much power to the US Treasury.


The package was proposed after a period in which markets saw almost unprecedented global turmoil and upheaval.

Key investment firm Lehman Brothers, the fourth largest investment bank in the US, filed for bankruptcy protection and the government had to intervene to rescue insurance giant AIG.

Meanwhile Bank of America stepped in to buy Merrill Lynch.

And investment banks Goldman Sachs and Morgan Stanley changed their status, enabling them to tap into commercial banking, effectively marking the end of an era on Wall Street.

The bail-out is being seen as a way to help boost the outlook for banks, and improve the availability of credit which has been harder to obtain for banks and businesses as well as individuals.

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  • Anonymous  On October 9, 2008 at 12:14 pm


    Recently an insurance company nearly wind up….

    A bank is nearly bankrupt……filing chapter 11 protection.

    How it affect you? Did you buy insurance? Did you buy mini note or bonds?

    Who fault?

    They bailout trouble finance company, but they will not bail out your credit card bills……And the bill out of company is still not enough yet…….You got no choice, and no point pointing finger but you can prevent similar things from happen again……

    The top management of the Public listed company ( belong to “public” ) salary should be tied a portion of it to the shares price ( IPO or ave 5 years )…. so when the shares price drop, it don’t just penalise the investors, but those who don’t take care of the company…..If this rule is pass on, without any need of further regulation, all industries ( as long as it is public listed ) will be self regulated……because the top management will be concern about their own pay check…… And they are still spend big money on hotel stay and luxury function……..

    Meanwhile if company was being acquired, there will be a great movement in terms of staff……eventually staff suffer also.

    Are you a partisan?

    Sign a petition to your favourite president candidate, congress member, House of representative again and ask for their views to not just comment on this, and what regulations they are going to commit and implementation the regulation, I believe should vote for the one who come suggest good implementation and let’s see who back up, which don’t implement after just mentioning in the election campaign…..If you agree on my point, please share with many people as possible…. Finance and Media are the two only industries can shaken politics ( Maybe Hackers can ), please help to highlight also…


    Facebook, come and join as a friend and share with your friends…..

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