US finance big guns defend rescue plan

US Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke waged a stout defence of their management of a $700bn (€554bn) financial bailout today, just a week after abandoning the original strategy behind the rescue.

Focusing the programme on infusing billions into banks – and possibly other types of companies – to pump up their capital and bolster lending to customers was deemed a faster and more effective approach to stabilising the financial system than buying rotten assets from financial institutions, the centrepiece of the original plan, Mr Paulson said.