September 28, 2008	Sunday	Ramazan 27, 1429

WASHINGTON, Sept 27: The US Congress embarked on a weekend mission to strike a deal on a proposed $700 billion bailout of the financial industry before stock markets open on Monday in an attempt to end the greatest financial crisis since the Great Depression.

Negotiators worked through Friday night and into Saturday morning while much of the country paused to watch the first debate between the presidential candidates, Democratic Sen Barack Obama of Illinois and Sen John McCain of Arizona.

Senate Democratic leader Harry Reid said negotiators have made significant progress, echoing optimism expressed by President George W. Bush.

After earlier talks collapsed in acrimony, Bush said he was confident that legislation would be passed “very soon” and there was “widespread agreement” on major principles.

“We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets,” Bush said in a weekly radio address.

“We must ensure that taxpayers are protected, that failed executives do not receive a windfall from your tax dollars, and that there is a bipartisan board to oversee these efforts.”

Reid said negotiators had about 15 issues still unresolved. “The goal is to try to come up with a final agreement by tomorrow,” said the Nevada Democrat, noting that lawmakers had made “significant progress”.

Pressure to reach a deal mounted after a white-knuckle ride on the financial markets this week in which some of the nation’s big, heavily indebted banks teetered, collapsed or refused to lend money to each other at low rates of interest, threatening to grind the financial system to a halt.

Regulators seized savings and loan Washington Mutual Inc late on Thursday in the biggest bank failure in US history, selling its assets to JP Morgan Chase & Co.

In Europe, Belgian-Dutch financial group Fortis NV denied it had a liquidity problem after its shares tumbled more than 20 per cent to a 14-year low. Later, Fortis sacked its interim chief executive.

Citing the crisis, Europe’s biggest bank, HSBC Holdings Plc, said it was cutting 1,100 jobs, adding to more than 80,000 job losses in banking in the past 18 months.

After Democrats from both the House of Representatives and Senate and Senate Republicans agreed in principle to a White House plan in which the Treasury would buy distressed debt from financial institutions staggering under the weight of failed mortgages, House Republicans demanded a more market-oriented approach.

Democrats offered to add a mortgage insurance option to bring on board conservative Republicans, who preferred to offer government insurance for troubled debts rather than buy them out.—Reuters