US Federal Reserve chairman Ben Bernanke says global financial markets are under 'extraordinary stress' and threatening an already weak US economy.
'The intensification of financial stress in recent weeks, which will make lenders still more cautious about extending credit to households and business, could prove a significant further drag on growth,' he told the congressional Joint Economic Committee.
Bernanke urged lawmakers to move quickly to put a $700 billion bail-out proposal for financial firms in place. He and US Treasury Secretary Henry Paulson are giving a second day of testimony at the US Congress about the package.
They have been arguing that failure to pass the emergency measure quickly would put the entire US economy at risk. But lawmakers appear unwilling to let Wall Street off the hook at the massive expense of US taxpayers.
'What they have sent to us - this is not acceptable,' Senator Christopher Dodd, chairman of the Senate Banking Committee, said after Bernanke and Paulson testified yesterday.
'A lot of reservations have been expressed by Democrats and Republicans on this matter,' said Dodd, a Democrat. 'This is not going to work. They're going to have to come back and work with us,' he said.
Democratic congressional leaders and some Republican colleagues have insisted the bailout crafted by Paulson, a former president of investment bank Goldman Sachs, should include sweeping safeguards and oversight to protect US taxpayers.
