Congress set to continue talks over government proposal to tackle financial crisis.
“I know many Americans are concerned by the cost of the bill,” he said, an acknowledgment of the fears expressed by many US citizens that those within the banking system seen as responsible for the crisis would avoid being penalised.
The original bill, proposed by the Bush administration, had been stalled by legislators who felt there was too little oversight for what would be a huge transfer of taxpayers money.
Bush said that the revised bill had greater safeguards, stronger oversight and “ensures failed executives do not receive a windfall from your tax dollars”.
But the deal on Monday appeared to have done little to calm global stock markets, with Asian markets initially rising but soon falling by as much as two per cent.
Britain’s FTSE 100 had tumbled 3.3 per cent by midday on Monday, while around Europe a swathe of bank rescue deals were taking shape.
Asked if the compromise bill would make it through congress, Chris Dodd, a Democratic senator, replied: “We hope so.”
The senator, who is chairman of the Banking Committee, warned that the bill is not a panacea for all the problems that have bedeviled the US financial markets.
But he said that failure to act would have spread the contagion of frozen credit markets even further.
“This is not just about Wall Street,” Dodd said. It is “potentially going to hurt other people across the country,” he said.
With many Americans struggling to save their homes from foreclosure, lawmakers were bracing for a grassroots backlash against a bailout for Wall Street banks, which contributed to the U.S. housing bubble with reckless lending.
The revised deal includes safeguards for taxpayers and provisions that would allow the government to claw back funds if house prices recover and its holdings of bad debt gain value.
The proposed legislation would disburse the $700bn in stages.
The first $250bn would be issued when the legislation is enacted, while another $100bn could be spent if the president decided it was needed.
The remaining $350 billion would be subject to congressional review.
Institutions selling assets under the plan would issue stock warrants to the government, a step intended to give taxpayers a chance to profit if markets recover.
If the bill goes through it will be the biggest intervention by the government in markets since the Great Depression of the late 1920s.