The US House of Representatives has come to its senses and voted for a modified version of the US$700 billion rescue plan it had rejected just days before. The passage of the bill does not mean the global financial crisis is over - far from it. But the historic vote in favour was urgently needed to steady the ship and provide a basis for moving forward. Rarely has a domestic US vote been watched so closely around the world. The international community knows, for better or worse, that the outcome will have an impact far beyond America's borders. No doubt the extreme reactions of the world's stock and credit markets to the House's 'no' vote on Monday gave its members pause for thought. Political leaders of America's closest allies practically pleaded with them to approve the rescue package. The plan's critics are right that it is flawed, will not solve the financial crisis and could burden taxpayers with the largest bailout bill in US history. Job losses and falling manufacturing activity point to an inescapable, and possibly steep, recession. But the crisis is unprecedented in scope and, left to itself, the perils it poses for the global economy are too great to contemplate. One way to tackle the crisis is to recapitalise financial institutions that have been burning holes in their balance sheets; indeed, many big US and European banks have raised large amounts of capital. But the US government cannot do this without deep-pocketed private investors. So, for a quick and systemic response, it has picked the only alternative, which is to use the new rescue fund to buy toxic investments from these institutions. The credit crisis that has spread around the world started in the US, but even China will not be immune. People outside the US blame Americans for the crisis. In turn, ordinary Americans blame their woes on greedy Wall Street financiers. The rescue plan, for example, has been described as a bailout for Wall Street, whose fallen titans bear a disproportionate responsibility for the crisis. But, in an interconnected world, everyone shares the blame to some extent. Years of profligate spending by US consumers and irresponsible lending by financial institutions helped create the housing and credit bubbles. But the binge in the United States was perpetuated by foreign investors such as China and cash-rich oil states in the Middle East, which sold their products to the US and recycled their profits in US-dollar-denominated investments and debt instruments. It was a merry-go-round that inflated almost all investable asset classes around the world and kept everyone happy until the music stopped. Some financial panics result solely from a loss of confidence. Once confidence is restored, the crisis goes away. But while there is a significant element of that in the current crisis, fundamental dislocations have been caused in the economies of the US and other countries. These need fixing. It has to be a global co-operative effort, and must include tougher regulations to make financial markets more transparent and accountable. We should not expect a quick end to the crisis. US banks have been quick to book their losses; more European and Asian banking institutions - the latter probably with far fewer losses - should do the same to avoid prolonging the crisis. With the latest congressional vote, the US has shown it can muster the political will to stabilise its financial markets. Other governments need to co-ordinate their efforts and help out. The world economy is intricately connected. We live in one world and share the same fate.