Institutions abroad lobbied successfully to be included.
PARIS - The financial crisis that began in the United States has spread across the globe. Now, the U.S. bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic U.S. mortgage debt owned by their American units to the Treasury, getting the same treatment as U.S. banks.
On Sunday, Treasury Secretary Henry Paulson indicated in a series of appearances on TV talk shows that an original proposal introduced Saturday had been widened. "It's a distinction without a difference whether it's a foreign or a U.S. one," he said in an interview with Fox News.
The original text of the bailout outline provided access to the $700 billion fund for any financial institution based in the United States. By Saturday evening, the language had been changed to allow access to any financial institution "having significant operations" in the United States.
Allowing foreign banks to participate in the federal rescue package has not yet drawn widespread scrutiny in Congress, where a number of lawmakers are wary that such an extension may worsen what could ultimately turn out to be a trillion-dollar bailout for Wall Street.
Christopher Whalen, a managing partner at Institutional Risk Analytics, said Paulson needed to justify why a wider bailout was in the national interest. "Can you imagine the Congress floating a bailout for Deutsche Bank or UBS? It is the responsibility of the German or Swiss government," he said.
UBS, the Swiss giant, has been among the hardest-hit institutions in the world. Both its chairman and chief executive left amid more than $40 billion in write-downs.
NEW YORK TIMES