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He said any government assistance to alleviate the housing crisis must be temporary and should be accompanied by reforms that aim to make the system more transparent and accountable to prevent a repeat of the crisis. He said no assistance should be given to speculators, or people who bought houses to rent or as second homes.

Asked whether the Fed went too far in helping Bear Stearns, McCain said: ''It's a close call, but I don't think so.'' He said he doesn't support federal bailouts unless it has catastrophic effects on the entire financial marketplace and there were indications that a Bear Stearns failure would have rippled across the entire economy.

McCain also said people shouldn't be able to buy homes with little or no money down, such as the interest-only loans banks have given the last few years. Lenders, he said, ''should never insure loans when the homeowner clearly does not have skin in the game.''

In the short term, he called for the country's accounting experts to meet to discuss current accounting systems and said the country's top mortgage lenders should pledge to do everything possible to help their cash-strapped but creditworthy customers.

As a freshman senator, however, McCain took a different approach. In early 1991, the Senate's ethics committee concluded that McCain ''exercised poor judgment in intervening with the regulators'' on behalf of banker Charles Keating Jr. Keating was a wealthy Arizona real estate developer and owner of a California thrift that failed during a nationwide savings and loan crisis -- when Keating and other bankers made risky investments with depositors' money.

McCain was known for accepting contributions from Keating, flying to the banker's home in the Bahamas on his company planes and taking up Keating's cause with U.S. financial regulators as they investigated him. Keating served more than four years in prison for fraud.

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