House votes down bail-out package

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The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.

The rescue plan – the result of tense negotiations between the government and lawmakers – was voted down by 228 votes to 205 votes.

Members of President George W Bush’s Republican party were strongly opposed to it. About two-thirds of them refused to back it.

Shares on Wall Street plunged within seconds of the announcement.

Mr Bush had earlier appealed to lawmakers to pass the bill, saying it would restore economic confidence.

The vote came as banks failed in the US, Europe and the UK.

The fourth largest US bank, Wachovia, is being bought by Citigroup after becoming the latest to hit problems.

In Europe, Benelux giant Fortis was bailed out by three governments, while in the UK the Bradford & Bingley bank was nationalised.

The US Federal Reserve, the European Central Bank and eight other central banks announced further moves to combat the crisis, by making a further $330bn available to provide liquidity to global money markets.

Speaking ahead of the vote, Mr Bush had argued that the bail-out plan was a “bold” one which he was confident would restore strength and confidence to the US economy.

But after a several hours of impassioned debate, the bill’s opponents – the majority of whom were from the Republican Party – got their way.

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