Bush calls for quick action on bank plan
US President George W Bush urged Congress to act quickly on the government’s plan to shore up housing finance giants Fannie Mae and Freddie Mac yesterday.
Speaking at a White House press conference as share prices across the world gyrated wildly, the President said of the two mortgage giants: “We must ensure they can continue to provide access to mortgage credit during this time of financial stress.”
He added: “I urge members to move quickly to enact the plan in its entirety, along with a good oversight legislation that we have recommended for both Fannie Mae and Freddie Mac.”
Treasury Secretary Henry Paulson said the US government would buy shares in Fannie Mae and Freddie Mac “only if necessary” and also called on Congress to approve the plan.
Fannie Mae and Freddie Mac “represent the only functioning secondary mortgage market,” Paulson said in written testimony yesterday to the Senate Banking Committee.
Senators from both parties called on the officials to fully explain the rescue packages, as one or two politicians voiced their concerns. Senator Richard Shelby pressed for details about the possible effects on the taxpayer and the US dollar.
“I fear we’re sitting on a financial powder keg,” Shelby said. Shares in the two mortgage giants each fell by more than 20 per cent as investors worried that, despite the government rescue, shareholders would be effectively wiped out.