US Treasury Secretary Henry Paulson has said the unpredictable nature of the current financial crisis means money for the US financial bail-out should not be diverted to other uses.
In testimony prepared for a US House of Representatives committee, he said the $700-billion Troubled Asset Relief Program, or TARP, was intended to shore up the financial system. Mr Paulson said there were other efforts under way to help US homeowners to avoid repossessions.
You can watch Henry Paulson's testimony here from 8pm on Tuesday evening.
Mr Paulson faces a grilling over a decision to use TARP funds for recapitalising financial institutions instead of buying bad or so-called toxic assets as was originally proposed.
He said that by the time Congress had approved the funds, the financial crisis had gone global and become so severe that 'an asset purchase programme would not be effective enough, quickly enough.'
Mr Paulson said the financial bail-out was not intended as a stimulus package for the economy. 'It was intended to shore up the foundation of our economy by stabilising the financial system, and it is unrealistic to expect it to reverse the damage that had already been inflicted by the severity of the crisis,' he said.
