Shares slide amid bail-out fears

Other News Materials 23 September 2008 07:56 (UTC +04:00)

Shares in Asia opened lower amid uncertainty about the impact of the massive US financial bail-out plan.

The falls followed a sharp slide in the US, where the administration has been discussing the $700bn (£382bn) rescue plan with lawmakers, reported BBC.

The White House says Congress must back the proposed bail-out to prevent wider economic harm.

But doubts over the speed at which it can be introduced have emerged from both Democrats and Republicans.

Many politicians appear alarmed by the scale and implications of the global financial crisis.

While most are anxious to find bi-partisan ways of getting behind the bail-out, others are critical of what they see as a waste of taxpayers' money, correspondents say.

In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, wiping out the gains made during Friday's rally.

Banking shares were particularly hard hit. Many investors switched to commodities such as oil and gold.

The falls came as US lawmakers held talks with the government on the proposed bail-out.

It allows US Treasury Secretary Henry Paulson to set up a fund to buy back much of the bad debt held by banks and financial institutions.

With the immediate sense of imminent collapse now passing, dissenting voices are beginning to emerge, says the BBC's Kevin Connolly in Washington.

Contentious issues include limiting compensation for executives of rescued firms, wider help for American homeowners at risk of losing their homes and demands for oversight.

"The Bush Administration has called on Congress to rubber stamp its bail-out legislation without serious debate or efforts to improve it," said US Senate Majority Leader Harry Reid. "That will not happen," he said.

Richard Shelby, a senior republican on the Senate Banking Committee, also hit out at the plan.

"It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said.

President George W Bush has warned that "failure to act would have broad consequences".

Both Mr Paulson and Federal Reserve Board Chairman Ben Bernanke are scheduled to testify before the Senate Banking Committee on Tuesday.