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Archive for Sunday, October 12, 2008

Bush, allies seek to calm jittery investors, but offer no specifics

President Bush makes a statement in the Rose Garden of the White House after meeting with G7 finance ministers about the financial crisis Saturday in Washington. Pictured from left to right: Italy's central bank governor Mario Draghi; IMF Managing Director Dominique Strauss-Kahn; Eurogroup's Chairman Jean-Claude Juncker; Japan's Finance Minister Shoichi Nakagawa; U.S. Secretary of State Condoleezza Rice, U.S. Treasury Secretary Henry Paulson; France's finance minister Christine Lagarde; Canada's finance minister James M. Flaherty; Britain's Chancellor of the Exchequer Alastair Darling, Italy's finance minister Giulio Tremonti; Germany's Minister of Finance Peer Steinbrueck; and World Bank President Robert Zoellick.

President Bush makes a statement in the Rose Garden of the White House after meeting with G7 finance ministers about the financial crisis Saturday in Washington. Pictured from left to right: Italy's central bank governor Mario Draghi; IMF Managing Director Dominique Strauss-Kahn; Eurogroup's Chairman Jean-Claude Juncker; Japan's Finance Minister Shoichi Nakagawa; U.S. Secretary of State Condoleezza Rice, U.S. Treasury Secretary Henry Paulson; France's finance minister Christine Lagarde; Canada's finance minister James M. Flaherty; Britain's Chancellor of the Exchequer Alastair Darling, Italy's finance minister Giulio Tremonti; Germany's Minister of Finance Peer Steinbrueck; and World Bank President Robert Zoellick.

October 12, 2008

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— President George W. Bush and financial leaders from nations rich and poor pledged Saturday to intensify their efforts to unblock a frozen financial system before it does more damage to an increasingly shaky global economy.

While there were no concrete offers of new moves, Bush vowed anew that his administration was doing everything possible to halt the biggest market disruptions since the Great Depression. The finance ministers spoke in unusually somber terms about the need for action.

Bush started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world's richest countries and later made an unexpected evening visit to the headquarters of the 185-nation International Monetary Fund a few blocks from the White House.

With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated for about 25 minutes in a 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 told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis. According to White House spokesman Tony Fratto, Bush acknowledged the problems began in the U.S., with a meltdown of the market for subprime mortgages in the summer of 2007. The president thought it was important to take the rare step of coming to such a meeting because the problems were spreading globally.

"It doesn't matter if you're a rich country or a poor country, a developed country or a developing country - we're all in this together," Bush said, according to Fratto. "We take this seriously, and we want to work with you."

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."

The financial turmoil also dominated discussions at the weekend's annual meetings of the IMF and World Bank. The IMF strongly endorsed a five-point plan put together a day earlier by the so-called Group of Seven wealthy powers, in which the United States, Japan, Germany, France, Britain, Italy and Canada jointly pledged to use all means possible to prevent major financial institutions from failing and to keep pumping money into the banking system to unfreeze lending and get credit - the lifeblood of the economy - flowing again.

"The depth and systemic nature of the crisis call for exceptional vigilance, coordination and readiness to take bold action," the IMF said in its joint statement. That statement, in an unusual move, repeated verbatim all of the commitments made in the G-7 statement that had been released on Friday.

"There is a resolve that this crisis will be resolved, that no tools will be spared to address this issue," Egypt's finance minister, Youssef Boutros Ghali, chairman of the IMF's policy panel, told a news conference late Saturday.

In his Rose Garden appearance, Bush made a plea for nations to work together to address the crisis, avoiding the go-it-alone protectionist trade strategies that worsened conditions during the Great Depression.

Fratto said Bush's commitment to collaborative action was repeated and agreed to by every official and minister who took part in the White House meeting.

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