US rescue package 'nearing agreement' in Congress

23 September 2008

The US treasury and lawmakers are continuing discussions over the new financial rescue package, which could take up over $1 trillion of public money.

House financial services committee chairman Barney Frank, who has been critical of the government's handling of the ongoing credit crisis, said that Congressmen and the government were nearing agreement.

A particular focus of the talks is the $700 billion proposed to be committed to the creation of a "bad bank", in which financial firms would be allowed to keep some of their most illiquid assets.

The plan comes about as markets continue to show extreme volatility, with the Dow plunging again on Monday and crude oil showing its biggest-ever one-day rise.

"We understand that bad market choices have put us in a situation where something has to happen," Mr Frank told Bloomberg.

He added: "We want it to happen with the best possible chance of it working, of the taxpayers ultimately being made whole."

The US Congress had been warned yesterday over delaying the financial plan by president George W Bush, who suggested that Democrats were planning to add "unrelated" measures to the legislation.

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