03 October 2008 19:56 [Source: ICIS news]
(Adds updates throughout)
WASHINGTON (ICIS news)--Final congressional approval of the $700bn (€504bn) financial rescue bill on Friday brought quick statements of welcome and relief among US chemical producers, home builders and the broad business sector.
The final US House of Representatives vote of 263-171 in favour of the bailout package - HR-1424 “The Emergency Economic Stabilization Act” - will “avert a catastrophic meltdown of our economy”, in the words of US Chamber of Commerce vice president Bruce Josten.
The chamber and its 3m member companies, which include chemical manufacturers, had lobbied Congress hard for the rescue plan.
With approval by the House, the bailout legislation is on its way to the White House and President George Bush is expected to sign it over the weekend - certainly before world markets open on Monday. The Senate had given its approval of the emergency bill on Wednesday.
“We applaud House passage of the financial rescue legislation today,” said Jennifer Scott, director of public affairs at the American Chemistry Council (ACC).
“We hope the bill can help bring about greater access to credit and help stabilize the domestic and global financial markets,” she added.
The rescue measure will give the US Treasury Department $700bn to buy up nonperforming mortgage loans and mortgage-related securities that underlie the financial crisis. The burden of those bad debts in banks and financial institutions worldwide had all but brought credit and lending to a halt.
Those domestic and global financial markets, said Scott, “are vital to the many customer industries that rely on chemistry, such as construction, lightweight vehicles, appliances, furniture and many others”.
“This legislation was absolutely essential to prevent collapse in our financial system and devastating damage to our nation’s economy,” said Sandy Dunn, chairman of the National Association of Home Builders (NAHB).
“Hopefully, this will set the stage for rebuilding confidence, restoring the availability of credit for businesses and consumers, and reverse the downward spiral in home prices and rising foreclosures that are root causes of today’s financial turmoil,” she said.
US Federal Reserve Board Chairman Ben Bernanke welcomed the congressional vote, saying that the bailout bill “is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses”.
“We will continue to use all the powers at our disposal to mitigate credit market disruptions and to foster a strong, vibrant economy,” Bernanke added.
($1 = €0.72)
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