March 25 (Bloomberg) -- Republican presidential candidate John McCain said a government bailout of banks should be based ``solely on preventing systemic risk'' and not on helping financial and property speculators.

``I will not play election-year politics with the housing crisis,'' McCain told a group of Hispanic small-business leaders in Santa Ana, California, today. ``I will evaluate everything in terms of whether it might be harmful or helpful to our effort to deal with the crisis we face now.''

The implosion of the U.S. subprime mortgage market, surging defaults and a glut of unsold houses are depressing property prices, and mortgage-backed securities have spread losses across the global financial system. The world's biggest financial companies have posted at least $195 billion in writedowns and credit losses tied to subprime mortgages and collateralized debt obligations, according to data compiled by Bloomberg.

The U.S. Federal Reserve helped engineer the rescue of Bear Stearns Cos. earlier this month, and Democratic presidential candidate Hillary Clinton has called for ``aggressive'' action by U.S. authorities to prevent more foreclosures.

Of 80 million U.S. homeowners, 55 million have a mortgage and 51 million of these ``are doing what is necessary -- working a second job, skipping a vacation and managing their budgets,'' McCain said. Homeowners should be required to make a down payment on property purchases to ensure they ``have skin in the game.''

Two-Year Program

Clinton has called for a $30 billion, two-year program to help homeowners and communities hit by rising foreclosures. Last month, Congress passed and President George W. Bush signed into law a $168 billion economic stimulus package that will send tax rebate checks to more than 100 million households this year.

``When we commit taxpayer dollars as assistance, it should be accompanied by reforms that ensure we never face this problem again,'' McCain said. ``Central to those reforms should be transparency and accountability.''

McCain also called for a review of so-called mark-to-market accounting rules, which require companies to estimate a value on holdings that aren't traded.

Mark-to-market has forced financial companies to write down the values of many less actively traded securities and may be ``exacerbating the credit crunch,'' said McCain.

Democrats said McCain failed to show compassion for homeowners buffeted by the subprime crisis.

`Watch it Happen'

``It's deeply troubling that John McCain is suggesting that the best way to address the housing crisis is to sit back and watch it happen -- which is just further evidence that he would continue President Bush's failed economic policies,'' Bill Burton, a spokesman for Senator Barack Obama's campaign, said in a statement.

``John McCain today showed that he doesn't understand the economy, the mortgage crisis or its impact on America's families and communities,'' said Democratic National Committee Chairman Howard Dean in an e-mailed statement.

``Instead of offering a concrete plan to address the crisis at all levels, McCain promised to take the same hands-off approach that President Bush used to lead us into this crisis,'' Dean said.

After his 13-minute speech, McCain participated in a discussion with Hispanic business leaders at the C&H Letterpress Inc. factory, where he gave his formal remarks. The discussion was moderated by Meg Whitman, the departing EBay Inc. chief executive officer who joined McCain's campaign as a national co- chairwoman last week.

``I am hopeful the worst is over,'' McCain said in answering a question about liquidity in the market. ``I still believe the fundamentals of our economy are strong.''

``Realistically, this will take a few months to sort out,'' Whitman said.

To contact the reporters on this story: Robin Wigglesworth in Oslo at wigglesworth@bloomberg.net; Hans Nichols in Santa Ana, California at hnichols2@bloomberg.net

Last Updated: March 25, 2008 17:29 EDT