Bush: banks rescue push helps reassure financial markets.

(From Guardian Unlimited)

The White House joined forces with Congressional leaders to pledge that a fallen $700bn bail-out of the banking industry will be quickly resurrected, fuelling a sharp recovery on the financial markets as Wall Street stocks surged with relief.

President Bush held "very constructive" talks today with both of his potential successors, John McCain and Barack Obama, about the options for reviving the emergency rescue plan that was dramatically thrown out by the House of Representatives on Monday.

Senate leaders began informal discussions about holding a fresh vote by the end of the week. Meanwhile, US regulators offered a helping hand to the financial industry through moves to broaden protection of customers' bank deposits and to liberalise accounting rules on valuing distressed assets.

In London, the FTSE 100 index rose by 83 points to 4,902. On Wall Street, the Dow Jones Industrial Average roared upwards, gaining 485 points to close at 10,850. The rally regained 60% of the ground lost on Monday, when the Dow suffered its worst ever points fall which wiped $1 trillion off the value of stocks.

In a televised statement, Bush insisted an initiative would still be enacted in spite of Monday's rebellion led by Republican congressmen.

"I recognise that this is a difficult vote for members of Congress," said Bush. "But the reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act."