Uncertainty over the global economy has deepened as the U.S. House of Representatives voted down a $700 billion bailout bill Monday to rescue the ailing financial industry. Since the bill was regarded as means of mitigating the current financial crisis and had been expected to be passed by the House, its rejection was all the more stunning.

The rejection of the bill came as a series of actions were being taken to assist sickly financial institutions in the United States and Europe with equity investments, buyouts or nationalization. The rejection led to panic selling across Wall Street. The benchmark Dow Jones Industrial Average plummeted almost 778 points, the biggest single-day point loss in U.S. history. Stock markets in Japan and some other parts of Asia and Europe also saw large declines.

In an attempt to help stabilize global financial markets, 10 central banks including those of the U.S., Japan and Europe had agreed to double the amount of U.S. dollars they would inject into their financial markets to a total of $620 billion. But the House's voting dashed what little optimism there was.

The subprime housing loan crisis in the U.S., which erupted in the summer of 2007, is now taking a heavy toll. Financial institutions in the U.S. and Europe are becoming suspicious of each other's creditworthiness. They are facing difficulty in borrowing funds in money markets. This situation could exert an adverse effect on the real economy. Coupled with the general slowdown of the U.S. economy, it could cause a chain reaction of corporate bankruptcies.

The U.S. House defeated the bailout bill on a 228-205 vote. Apparently many members from both the Republican and Democratic parties opposed the bill after taking into consideration their constituents' hostility to the bill. The rejection has caused the U.S. to lose precious time in coping with the crisis. The U.S. government and congressional leaders must act quickly to pass a plan to help stabilize the U.S. financial system. Japan also needs to take additional measures to protect its economy from blows from the crisis.