Bush to host global financial summit
Says preserving free enterprise is essential
CAMP DAVID, Md. - President Bush, looking for answers to a global economic emergency with just three months left in office, said yesterday that he will host an international summit to discuss ways to fix the world financial system, but he warned against changes that threaten capitalism.
"We will work to strengthen and modernize our nations' financial systems so we can help ensure that this crisis doesn't happen again," Bush said at the Camp David retreat.
Bush, meeting with President Nicolas Sarkozy of France and President Jose Manuel Barroso of the European Commission, did not announce a date or site for the summit. But Sarkozy suggested that it be held in the shadow of Wall Street before the end of next month.
"Insofar as the crisis began in New York, then the global solution must be found to this crisis in New York," Sarkozy said.
In a joint statement issued after their slightly more than 2 1/2-hour visit, the three leaders said they would contact other nations next week about having a summit in the United States soon after the presidential election, then a series of subsequent summits to address the challenges facing the global economy.
The first summit would focus on progress being made to address the current crisis and "seek agreement on principles of reform needed to avoid a repetition of the problems and assure global prosperity in the future." Later meetings, they said, would be designed to implement agreement on specific steps to be taken to meet those principles.
Bush has backed the steps European nations have taken to fix the financial markets and is willing to listen to a range of ideas from both developed and developing nations, but he hasn't signed on to the more ambitious, broad-stroke changes that some European leaders have in mind to avoid a repeat of the market crisis that rippled around the globe.
Sarkozy has floated the idea of overhauling rating agencies and even exploring the future of currency systems.
Prime Minister Gordon Brown of Britain, who engineered a British bank bailout that inspired US and European rescues, is proposing radical changes to the global capitalist system, including a cross-border mechanism to monitor the world's 30 biggest financial institutions.
Standing outside on a crisp autumn day at the helipad on the presidential retreat, all three leaders spoke soberly about what Bush called a "trying time for all our nations."
"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism - a commitment to free markets, free enterprise, and free trade," Bush said.
"We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and helped millions of people escape poverty around the world," he said.
Since Oct. 9, 2007, when the Dow topped 14,000, investors have lost $8.3 trillion from pension funds, college savings plans, 401(k)s, and other investments. Congress approved a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry. The crisis has rocked markets across the world, prompting fears of a worldwide recession.
"We're dealing with a significant problem," Bush said, calling for patience to let rescue measures take effect. " But the American people and our friends around the world can know that we have confidence that the measures will work."
Barroso said it was time for the entire international financial system to be revamped. "We need a new global financial order," he said. "The European Union and the US - we can make a difference together."
Sarkozy also stressed the urgency of what he said was a "worldwide crisis" that demands a "worldwide solution."
He said he agreed with Bush's view that changes not challenge the foundations of market economics. But he added: "We cannot continue along the same lines because the same problems will trigger the same disasters."
Sarkozy said hedge funds and tax havens cannot continue to operate as they have in the past; financial institutions cannot continue without supervisory control. "This is no longer possible. . . . This sort of capitalism is a betrayal of the sort of capitalism we believe in," he said.
In a ray of positive economic news, the average nationwide price of a gallon of regular gasoline fell five cents yesterday to $2.99, according to auto club AAA, the Oil Price Information Service, and Wright Express. Prices have not been below $3 nationally since Feb. 16.
The price is slightly above the national average price of $2.81 a year ago, but 27 percent lower than the all-time high of $4.11 reached July 17.