Hank Paulson, US Treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, on Tuesday urged Congress to rapidly approve their $700bn government intervention to rescue the US financial system from collapse.

In remarks released ahead of a hearing before legislators on the Senate banking committee, Mr Paulson defended the plan, saying it would "avoid a series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses both small and large, and the very health of our economy."

Mr Bernanke said global financial markets remained under "extraordinary stress" and congressional action was "urgently required".

The Bush administration and congressional leaders are engaged in frenzied negotiations over the details of the rescue plan, with Democrats pushing for tighter oversight, curbs on executive compensation of banks participating in the bail-out plan, and additional economic stimulus legislation.

Hopes for a quick deal were threatened on Monday night when Richard Shelby, the top Republican on the Senate banking committee, questioned whether the plan made any sense at all. "I am concerned that Treasury's proposal is neither workable nor comprehensive, despite its enormous price tag," Mr Shelby said.

Although the Democratic leadership in Congress has been broadly supportive of the need for a rescue plan, some senior lawmakers in the party have raised doubts about its structure. Henry Waxman, chairman of the House oversight and government reform committee, said it "completely eviscerates the concept of moral hazard. It would enrich the Wall Street executives whose reckless investments caused the financial crisis."

Nonetheless, in his testimony, Mr Paulson said that it was "clear" there was bipartisan support for "an urgent legislative solution". But he warned that "we need to build upon this spirit to enact this bill quickly and cleanly, and avoid slowing it down with other provisions that are unrelated or don't have broad support."

Continued at Financial Times