US lawmakers publish rescue deal

US politicians have announced a $700bn deal to rescue America's financial system and end the credit crunch.

The move, backed by both Republican and Democratic leaders, allows the Treasury to spend up to $700bn (£380bn) buying bad debts from ailing banks in the US.
President George W Bush urged lawmakers to support the bill, which needs approval by both houses of Congress.
Some Republicans have voiced objections to massive state intervention in the financial sector.
The deal was announced after days of high-level wrangling between Republicans and Democrats in Congress over the content of the bill.
Both parties had vigorous objections to a proposal submitted last week by Treasury Secretary Henry Paulson that would have given him sweeping powers over how the money was spentHis plan was prompted by a string of failures in large US financial institutions, including the government bail-out of insurance giant AIG.
If approved by the Senate and House, the revised plan will lead to the biggest intervention in the markets since the Great Depression in the 1930s.
Nancy Pelosi, the Democratic Speaker of the House of Representatives, said the agreement was "not a bailout of Wall Street", but designed to ensure pensions, savings and jobs would be safe.
Democratic Senate leader Harry Reid said the deal was a big improvement on the initial proposal.
"They wanted a blank cheque and we couldn't give them one... Now we have to get the votes."
'Necessary tools'
The negotiations had lasted all weekend and were so intense that at one point Treasury Secretary Hank Paulson suffered what was described as a "woozy spell". The US administration had wanted a deal to be announced before markets opened in Asia.
After senior members of Congress announced the agreement, President Bush gave his backing to the draft legislation.
He said the bill would send a strong message that the US was serious about restoring confidence in its financial markets.
"This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown," he said in a statement.
The first stock markets to open after the news broke reacted positively, with Tokyo's Nikkei index and Seoul's Kospi registering early gains.
No golden parachutes
The deal addresses several of the key concerns raised by both Democrats and Republicans:
The government will get the money in tranches - $250bn straight away, and $100bn at the request of the White House; Congress can veto the release of the remaining $350bn
Banks that accept bail-out money will have to hand over shares in return, which allows tax payers to benefit from the banks' recovery
Top bankers, meanwhile, will see their pay limited, and "golden parachutes" - huge payments when they leave the firm - will be banned
The banking industry will have to help finance the bail-out if the money can not be recovered from the struggling banks themselves
Four agencies will monitor the deal, including an independent Inspector General and a bipartisan oversight board
Banks will be obliged to join an insurance programme to protect them against the losses of mortgage-backed securities
The bill, called the Emergency Economic Stabilization Act of 2008, faces its first hurdle later on Monday when the House votes on it, says the BBC's Justin Webb in Washington.
It goes before the Senate later in the week.
The proposed legislation was now "frozen", said Ms Pelosi, which means critics can not strike out individual provisions that they do not like.
However, several key critics of the deal called on their fellow legislators to block it.
Financial woes
The Bush administration submitted its initial proposal after several financial institutions got into trouble - unable to free up the money to keep their daily business going.
The liquidity problems have not been limited to the US.
In the United States' largest bank failure, Washington Mutual was taken over by regulators and sold on to JPMorgan Chase
Lehman Brothers collapsed, Merrill Lynch sought refuge in a takeover by Bank of America and Morgan Stanley secured a large capital injection from a Japanese rival
US insurance giant AIG had to be bailed out by the US government, which in effect took an 80% stake in the firm
In the UK, meanwhile, mortgage lender Bradford & Bingley is set to be nationalised, with the savings part of the business to be sold to Spanish banking group Santander
The governments of Belgium, Luxembourg and the Netherlands agreed late on Sunday evening to invest 11.2bn euro in huge financial services group Fortis, in effect nationalising it.