The decision by Hank Paulson, Treasury secretary, to scrap the asset-purchase side of the $700bn financial rescue plan was applauded by Republicans and Democrats on Capitol Hill on Wednesday.

“I’m glad to see that Secretary Paulson has finally seen the light,” Chuck Schumer, a Democratic senator and chairman of the joint economic committee, told reporters. “To me, as most of you know, it was clear from the beginning that capital injections were the way to go.”