Page last updated at 16:53 GMT, Friday, 19 September 2008 17:53 UK

McCain criticises bank assistance

Senator John McCain in Wisconsin
John McCain addressed business leaders in Wisconsin

US Republican presidential candidate John McCain has said he is against the state bailing out struggling banks and financial companies.

Mr McCain said the US Federal Reserve should get back to its core business of managing money supply and protecting the strength of the US dollar.

His comments came as the US treasury secretary announced a bank rescue plan.

His rival Barack Obama said "struggling families" should not be forgotten while the focus is on Wall Street.

Mr McCain, speaking to business leaders in Wisconsin, said: "The Federal Reserve should get back to its core business of responsibly managing our money supply and inflation."

He added: "It needs to get out of the business of bailouts."

With billions of dollars in public money at stake, it will not do to keep making it up as we go along

John McCain
Republican presidential candidate

His ideas to solve the financial crisis in the US included reform of financial institutions.

"I will propose and sign into law reforms to prevent financial firms from concealing their bad practices," he said.

Mr McCain, senator for Arizona, also appeared to make a criticism of the Bush administration's moves to solve the crisis.

"In cases where failing companies seek taxpayer bailouts, the Treasury Department will follow consistent policies in deciding whether to guarantee loans," he said.

"With billions of dollars in public money at stake, it will not do to keep making it up as we go along."

Financial turmoil

Treasury Secretary Henry Paulson announced on Friday that a rescue plan would be thrashed out with Congress over the weekend to help rid US banks of their bad debts.

The proposed US government rescue plan came at the end of a week of almost unprecedented turmoil on world financial markets.

In the US, the Federal Reserve announced an $85bn (48bn) rescue package for AIG, the country's biggest insurance company, to save it from bankruptcy.

Barack Obama campaigning
Barack Obama called for help for 'struggling families'

And the US Treasury earlier brought troubled US mortgage giants Freddie Mac and Fannie Mae under tighter government control.

Campaigning in Wisconsin, Mr McCain also criticised his rival, Democratic candidate Mr Obama, for links to Freddie Mac and Fannie Mae.

Mr McCain said Fannie Mae's former chief executive, Jim Johnson, once headed Mr Obama's vice-presidential search committee and that the Illinois senator had received large campaign contributions from the two firms.

"Maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems?" Mr McCain asked.

Joint effort

Mr Obama called for any plans to resolve the financial crisis to be free of political arguments:

"It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, and that leaders in both parties work in concert to solve the problem at hand."

In a statement, he said workers must not be forgotten while the Bush administration focuses on Wall Street.

"For too long, this administration has been willing to hit the fast-forward button in helping distressed Wall Street firms while pressing pause when it comes to saving jobs or keeping families in their homes," he said.

"Swift and unprecedented action to shore up Wall Street must come alongside equally swift and serious efforts to help struggling families on Main Street, create new jobs, and grow our middle class once more," the Democratic candidate added.

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