U.S. Senate urged to back revised bank rescue

By Donna Smith and Huw Jones

WASHINGTON/BRUSSELS (Reuters) - European policymakers urged the U.S. Senate on Wednesday to approve a revised $700 billion (388 billion pound) financial rescue plan aimed at tackling the worst financial crisis since the 1930s.

The contagion stemming from risky home loans has toppled Wall St firms, frozen lending among global banks, and overshadows campaigning as Americans prepare to vote for their next president on November 4.

A revised package which the Senate will vote on sometime after 7:30 p.m. EDT (2330 GMT) would increase to $250,000 from $100,000 the amount of individual deposits guaranteed.

The main aim of the package remains unchanged -- to allow the U.S. Treasury to buy toxic mortgage-related assets from banks in a bid to unlock credit markets and head off deeper damage to the U.S. and global economies.

Analysts said a rebound in stock markets over the past two days indicated renewed hopes that the Senate would pass the deal, a move which would put pressure on the House of Representatives to follow suit when it meets on Thursday.

The House threw out on Monday the initial plan assembled by Treasury Secretary Henry Paulson amid anger that ordinary taxpayers were being asked to bail out the banking industry.

For the bill to become law, approval is required by both the Senate and the House of Representatives.

On Wednesday Jean-Claude Juncker, chairman of the euro zone's finance ministers, said the United States had to adopt the plan, a view echoed by Russian finance minister Alexei Kudrin.