24 Sep 2008

Action urged over US bailout

9:52 am on 24 September 2008

The United States Treasury Secretary and the head of the Federal Reserve have urged Congress to act swiftly to put a $US700 billion bailout of the financial system in place, warning that delay would put the economy at risk.

Fed chairman Ben Bernanke told the Senate Banking Committee on Tuesday that financial markets are under severe stress and urged immediate action to buy billions of dollars worth of tainted mortgage assets.

Treasury Secretary Henry Paulson also called on Congress not to weigh down the proposed bailout with unrelated provisions that would delay addressing key issues.

Under the package, the government would buy bad mortgage debt from financial institutions to try to keep credit markets from choking up.

Lawmakers have vowed to move without delay, but also are insisting on changes.

These include more protections for taxpayers and limits on compensation for executives of firms that would be offloading their bad assets onto the government.