The White House, under fire from Democrats and Republicans alike, has defended giving billions of bail-out dollars to banks that plan to reward shareholders and executives or even buy other banks.

As one of the President's top economic advisers admitted parts of the US are in a recession, the Bank of America's chief executive vowed to plough bail-out cash into loans and profit growth.

One of US President George Bush’s top economic advisers said today that parts of the country were experiencing a recession.