America's fifth largest investment bank Bear Stearns has been given emergency funding to save it from collapse. Bear Stearns was particularly exposed to the sudden plunge in the value of subprime or higher risk mortgages, which has triggered the housing slump in the United States. Justin Webb reports from Washington.

On Wall Street it was well-known that Bear Stearns was particularly exposed and it was rumoured that the bank faced collapse. In the words of its president Alan Schwartz, "Amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated." The rescue deal involves another bank, JP Morgan, using funds guaranteed by the Federal Reserve Bank for 28 days.

President Bush has again acknowldeged that the US economy is facing tough times. While at a speech to business leaders in New York, he said the economy was resilient and he remained optimistic that it would return to stronger growth.