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House votes down bail-out package House votes down bail-out package
(10 minutes later)
The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.
The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.
About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.
Shares on Wall Street plunged within seconds of the announcement, after earlier falls on global markets.Shares on Wall Street plunged within seconds of the announcement, after earlier falls on global markets.
A White House spokesman said that President George W Bush was "very disappointed" by the result.A White House spokesman said that President George W Bush was "very disappointed" by the result.
He would meet members of his team in the coming days to "determine next steps", spokesman Tony Fratto said.He would meet members of his team in the coming days to "determine next steps", spokesman Tony Fratto said.
The BBC's Adam Brookes, in Washington, said Democratic leaders in the House were likely to try and convince a number of their members who voted against the bill to change their minds in coming days. The vote followed a day of turmoil in the financial sector.
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  • Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities
  • Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival
  • The UK government announced it was nationalising the Bradford & Bingley bank
  • Global shares fell sharply - France's key index lost 5%, Germany's main market dropped 4% while US shares also lost ground.
class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAY I'm glad the bailout bill failed. I work five days a week and pay my bills. I did not want to pay for Corporate America's greed. Lisa, Baltimore class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5388&edition=2&ttl=20080929194022">Send us your comments Blame game
Speaking after the vote, Republican leaders in the House of Representatives suggested the Democrats were to blame, accusing them of failing to mobilise their majority in the chamber. So grave are the consequences of this decision, reports the BBC's Kevin Connolly from Washington, that the speaker of the house paused for several long minutes after the vote was taken before declaring it official.
Democratic presidential candidate Barack Obama spoke shortly after the vote, saying it was an outrage that ordinary people were being asked to clean up Wall Street's mess. The no vote plunged the world of Washington politics into turmoil and the markets into deep and instant chaos with rapid falls on Wall Street, our correspondent says.
Impassioned debate Mr Bush had argued that the bail-out plan was a "bold" one which he was confident would restore strength and confidence to the US economy.
Speaking ahead of the vote, Mr Bush had argued that the bail-out plan was a "bold" one which he was confident would restore strength and confidence to the US economy. class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAY I am glad the bailout bill failed. I work five days a week, save cash and pay my bills. I did not want to pay for Corporate America's greed Lisa, Baltimore class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5388&edition=2&ttl=20080929194022">Send us your comments
But after a several hours of impassioned debate, the bill's opponents - the majority of whom were from the Republican Party - got their way.But after a several hours of impassioned debate, the bill's opponents - the majority of whom were from the Republican Party - got their way.
They had raised concerns about both the content of the plan and the speed with which they were being asked to pass it.They had raised concerns about both the content of the plan and the speed with which they were being asked to pass it.
Some agreement on issues such as oversight, greater protection for taxpayers and curbs on executive bonuses had been reached in fraught weekend talks.Some agreement on issues such as oversight, greater protection for taxpayers and curbs on executive bonuses had been reached in fraught weekend talks.
But these concessions ultimately failed to persuade many lawmakers that the plan was in the best interests of the nation. But these concessions ultimately failed to persuade enough lawmakers that the plan was in the best interests of the nation.
The vote came as banks failed in the US, Europe and the UK. Speaking after the vote, Republican leaders in the House of Representatives suggested the Democrats were to blame, accusing them of failing to mobilise their majority in the chamber.
The fourth largest US bank, Wachovia, is being bought by Citigroup after becoming the latest to hit problems. Democratic presidential candidate Barack Obama spoke shortly after the vote, saying it was an outrage that ordinary people were being asked to clean up Wall Street's mess.
In Europe, Benelux giant Fortis was bailed out by three governments, while in the UK the Bradford & Bingley bank was nationalised. "If I am president I will review the entire plan on the day I take office to make sure that it is working to save our economy and (that) you get your money back," he said.
The US Federal Reserve, the European Central Bank and eight other central banks announced further moves to combat the crisis, by making a further $330bn available to provide liquidity to global money markets. He added that he expected the Congress to pass a bail-out bill in some form and called for calm, although he admitted the path could be a difficult one.
Frantic steps will now be taken to get some kind of amended version of the bill through Congress, our correspondent says.
But this vote would have shaken the confidence of the financial world and the ability of America's leaders to come up with convincing answers at a moment of crisis, our reporter adds.