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Bush, Fiscal Leaders Target Crisis

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The Associated Press

Published: October 12, 2008

WASHINGTON - President Bush and financial leaders from nations rich and poor pledged Saturday to intensify 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. He 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 joined 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 Bush 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 that the problems began in the United States, with a meltdown of the market for subprime mortgages in summer 2007. Bush felt 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 this 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 the plan, 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.

"There is a resolve that this crisis will be resolved, that no tools will be spared to address this issue," Egyptian 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 on the crisis, avoiding the go-it-alone protectionist trade strategies that worsened conditions in the Great Depression.

Bush said the G-7 nations have pledged to "do what it takes to resolve this crisis."

Officials in Europe prepared for a meeting today of leaders of the 15 nations using the euro. German Chancellor Angela Merkel and French President Nicolas Sarkozy said Saturday they oppose creation of a common financial rescue fund for Europe.

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