The dollar buckled, stocks tumbled and the price of oil jumped yesterday as the $700bn (£376bn) US government bail-out plan for the financial sector made slow progress in Washington and once-mighty Wall Street names turned to Japan to safeguard their future.

Meanwhile, the Federal Reserve threw open the doors to investment in the US banking industry by private equity firms, sovereign wealth funds and corporate investors – in the hope that this would direct muchneeded capital to US banks.

The US central bank said it would raise the maximum stake a minority investor could take in a bank holding company from 25% to 33% in some instances and lift the ban on board representation for minority investors.

Financial Times