HOUSE REJECTS US BAIL-OUT BILL

Markets were sent into a tailspin on Monday when the House of Representatives shocked investors by voting to reject the Bush administration's $700bn (€484bn) bail-out plan.

The vote effectively torpedoed unprecedented government interventions to quell the fear in the financial markets which had earlier seen five US and European banks rescued or nationalised and the world's central banks unleashing a gigantic global liquidity operation.

House Republicans voted roughly two-to-one against the bail-out, while the Democrats split three-to-two in favour. Congressional leaders took procedural steps that could enable a revote, but analysts said Democrats would be unlikely to try again without the promise of more Republican support.

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