US President George Bush has eased pressure on financial markets with assurances that a $700 billion bail-out for the financial sector can be revived.
The dollar rallied and US stock markets recovered after suffering their blackest day in 20 years on Monday as the US House of Representatives rejected the rescue plan.
President Bush has said the US Congress 'must act' on the government's plan to bail out the financial system. 'I assure our citizens and citizens around the world that this is not the end of the legislative process,' he said, before US markets opened.
He said the US economy was depending on decisive action from the government, and warned that economic damage would be 'painful and lasting' if this were not taken. The President said he knew Americans were worried about the cost of the plan, but he expected that much of the money would eventually be paid back.
The White House said Bush had 'constructive' talks with presidential candidates John McCain and Barack Obama today. Both have urged their fellow members of Congress to pass the bail-out package.
Senator Harry Reid and Senator Mitch McConnell, the top Democrat and Republican respectively in the US Senate, promised swift action.
Congress was not in session on Tuesday because of a Jewish holiday. The Senate could take up bail-out legislation as early as Wednesday. The House is to return on Thursday.
Lawmakers held discussions with each other and Bush administration officials today to explore options, including possible changes in the measure the House defeated.
They could revise the bill or bring it up for another House vote. The next vote could occur in the Senate, where there has been more bi-partisan support for the plan.
