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Will a bail-out be agreed?

By Sarah Smith

Updated on 25 September 2008

A broad agreement with Congress to rescue the US markets is yet to happen as the presidential rivals meet at the White House.

President Bush will meet John McCain and Barack Obama - along with leading congressmen - as a plan to rescue the global economy from collapse is now all but approved.

After days of protracted negotiations, Democrats and Republicans say they have reached "fundamental agreement" after Mr Bush warned of deep recession and financial panic if the deal failed.

The Troubled Asset Relief Program or TARP as it is known, is an unprecedented attempt to rescue the struggling markets.



How it would work

Toxic Assets


The US treasury would buy up bad mortgage assets now clogging up the financial markets, encouraging banks to lend to customers and each other.

Cost


But with no limit on how much the US government would end up paying, the cost could be far more than $700bn.

Oversight


A company would be set up to carry out the trading, but it would currently only report to congress twice a year.

Bonuses


Many congressmen also do not want Wall Street's top executives making huge bonuses out of what is essentially taxpayers' money.

Chaka Fattah interview

A little earlier we spoke to Democratic congressman Chaka Fattah and started by asking him how he thought the bail out package was going to progress through congress.



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