United States President George W Bush has announced plans for a financial sector rescue package.
The bail-out is expected to cost well into the hundreds of billions of dollars.
As part of the plan mortgages will be bought out from the banks..
Earlier, the US Securities and Exchange Commission placed a temporary ban on all short-selling of financial stocks.
Treasury Secretary Henry Paulson says the US economy is at risk without the action.
“The underlying weaknesses in our financial system today is illiquid mortgage assets that have lost value as the housing correction has proceeded.”
“These illiquid assets are choking off the flow of credit that is so vitally important to our economy.”