President George W. Bush yesterday called for measures to increase financial literacy among Americans, acknowledging that many US homeowners had signed up for mortgages they did not fully understand.

Mr Bush said there was need for 'more transparency' in financial documents to avoid a repeat of this year’s crisis in the US subprime mortgage sector.

The president said the Federal Housing Administration should have the ‘flexibility’ to help refinance mortgages.

But he was opposed to a direct bail-out for homeowners and signalled doubt about calls for Fannie Mae and Freddie Mac, the government-backed mortgage lenders, to be given a bigger role in stabilising the market.