World’s Financial Leaders Vow to Unite
WASHINGTON — President Bush and the world’s financial leaders staged repeated displays of unity Saturday to combat an unfolding credit crisis, hoping to calm investors whose panic has spread despite bold and accelerating government action.
While there were no concrete offers of new moves made on Saturday, Mr. Bush pledged anew that his administration was doing everything possible to halt the biggest market disruptions since the Great Depression and the finance ministers spoke in unusually somber terms about the need for action.
Mr. Bush, who had started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world’s richest countries, made an unexpected late day visit to the headquarters of the 185-nation International Monetary Fund. With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated in an evening discussion with the Group of 20 which includes rich countries and major developing nations such as China, Brazil and India.
Brazilian Finance Minister Guido Mantega said that the president had stressed the seriousness of the current situation and told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis.
In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together “to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world’s financial markets.”
Earlier Saturday, after emerging from a meeting with finance ministers from the group of seven leading industrial nations, Mr. Bush said that turmoil in financial markets requires a “serious global response,” but cautioned that the world wide economic crisis won’t be solved “overnight.”
“We’re in this together, we will come through it together,” Mr. Bush said in remarks from the Rose Garden. “We will stand together in addressing this threat to our prosperity, we will do what it takes to resolve this crisis, and the world’s economy will emerge stronger as a result.”
At a meeting in Washington Friday, the G-7 agreed on a framework to address the crisis, but fell short of unveiling a specific plan for joint action.
“We resolved to continue our strong efforts to return our economies to the path of stability and long-term growth,” Mr. Bush said, adding that the U.S. will use “all the tools” at its disposal to resolve the crisis.
The G-7 countries agreed Friday to work to prevent systemically important financial institutions from failing and take steps to thaw credit markets, ensure that bank-deposit insurance programs are solid, and make sure financial institutions can access liquidity and raise capital.
The global crisis dominated discussions at the annual meetings of the International Monetary Fund and World Bank over the weekend. The 185-nation IMF strongly endorsed the G-7 plan to do everything possible to protect the financial system and get credit flowing again. “The depth and systemic nature of the crisis call for exceptional vigilance, coordination and readiness to take bold action,” the IMF said.
“There is a resolve that this crisis will be resolved, that no tools will be spared to address this issue,” Egypt’s finance minister, Youseff Boutros Ghali, chairman of the IMF’s policy panel, told a news conference late Saturday.
Treasury Secretary Henry Paulson said the U.S. is working to have a standardized government program for purchasing equity in financial companies up and running “as soon as possible.” That program would supplement the government’s new authority to purchase bad assets from struggling banks and steps the Federal Reserve has taken to boost liquidity.
“These extraordinary efforts are being implemented as quickly and as effectively as possible,” Mr. Bush said. “The benefits will not be realized overnight, but as these actions take effect they will help restore stability to our markets and confidence to our financial institutions.”
Mr. Bush said the U.S. would have a “special role” in leading the global response to the market meltdown.
“All of us recognize that this is a serious global crisis, and therefore requires a serious global response for the good of our people,” the president said.
European leaders are meeting Sunday in Paris for an emergency summit on the situation.
Mr. Bush said it is crucial that the global response not pit countries against each other.
“As our nations carry out this plan, we must make sure the actions of one do not contradict or undermine the actions of another,” he said. “In an interconnected world, no nation will gain by driving down the fortunes of another.”
In a show of unity, Mr. Bush was joined in the Rose Garden by the G-7 finance ministers, Mr. Paulson, Secretary of State Condoleezza Rice and the heads of the International Monetary Fund and World Bank. They stood against a backdrop of G-7 flags. The president didn’t take questions, and left the White House shortly after his remarks to take his regular Saturday morning bicycle ride.
The G-7 is comprised of the U.S., Japan, Canada, the U.K., Italy, France and Germany.
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