US $700bn bailout talks continue

According to US Congress, America’s $700 billion (£380 billion) bailout plan is still in negotiations but considerable progress is being made.

According to Harry Reid, the Senate majority leader, there are 15 outstanding issues to be resolved in agreeing Treasury secretary Henry Paulson’s Troubled Asset Relief Programme (Tarp).

Meanwhile, The White House said the prospect of a deal is essential before financial markets open tomorrow.

According to many reports, the American banking system faces meltdown unless a rescue package is implemented immediately.

As he addressed the nation, President George W. Bush said there was ‘widespread agreement‘ in Washington on the principles of the rescue plan and that the final cost would be less than the $700 billion.

Barney Frank, chairman of the House financial committee, is convinced that an agreement should be reached today.

However, even if the bailout plan goes ahead, economists are warning that it is unlikely to resolve the crisis.

Uncertainty surrounding the rescue plan saw shares in American bank, Wachovia, plummet by 27% on Friday.

Meanwhile, Ohio-based National City Corporation, also saw its shares plunge by 25% amid concerns, as yet unjustified, that customers could begin withdrawing their savings.

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