Bush calls for unity amid economic turmoil
11/10/2008 - 13:50:17The financial turmoil is a “serious global crisis that requires a serious global response”, US president George Bush said today.
Mr Bush was speaking after a rare meeting with international finance ministers, including chancellor Alistair Darling, at the White House.
The crisis talks came after the US government announced it would buy stock in troubled financial institutions in a bid to stabilise the global markets.
“As our nations carry out this plan we must ensure the actions of one country do not contradict or undermine the actions of another,” Mr Bush said.
“In our interconnected world no nation will gain by driving down the fortunes of another.
“We’re in this together, we will come through it together.”
Bush said that while nations must confront the challenges unique to their individual financial systems, they must also ensure their actions were “co-ordinated”.
He said the joint interest rate cut earlier this week was a good example of this collaboration.
“I’m confident that the world’s major economies can overcome the challenges we face,” Mr Bush said.
“There have been moments of crisis in the past when powerful nations turned themselves against each other, started to wall themselves off from the world.
“This time is different.”
Speaking with the G7 finance ministers – from the UK, the US, France, Germany, Italy, Japan, and Canada – stood behind him in the White House Rose Garden, Mr Bush went on: “The leaders gathered in Washington this weekend are all working toward the same goals.
“We will do what it takes to resolve this crisis and the world’s economy will emerge stronger as a result.”
Yesterday, a UK government delegation arrived in Reykjavik for talks to try to settle the dispute over the Icelandic government's refusal to guarantee deposits of British savers in the country's failed banks.
Some £1bn (€1.25bn) of local authorities’ cash as well as billions more from small investors is tied up in Icelandic banks.
In the UK, the FTSE 100 closed below the 4,000 mark for the first time in five years yesterday and, on Wall Street, the Dow Jones industrials average of blue chip firms completed its worst week ever.
US Treasury Secretary Hank Paulson announced the US programme to purchase stock in the financial institutions would be open to a broad array of institutions following meetings with the G7.
He said the ministers were focused on the immediate need to stabilise the financial markets and said it had never been more important to find “collective solutions”.
“As we develop plans to purchase equity... we are working to develop a standardised programme that is open to a broad array of financial institutions,” he said.
“We are developing strategies to use the authority to purchase and insure mortgage assets, and to purchase equity in financial institutions, as deemed necessary to promote financial market stability.”
The US administration received the authority to make direct purchases of stock in banks in the US$700bn (€517.7bn) rescue package which the Congress passed last week.
It would mark the first time the US government has taken equity ownership in banks in this manner since a similar programme was employed during the Great Depression.
Mr Paulson said the government’s programme would be designed to complement the efforts of banks to raise fresh capital from private sources.
He said the government’s stock purchases would be of non-voting shares so that the government will not have power to run the companies.
The purchase of equity stakes in companies would be in addition to the main thrust of the rescue effort, which is to purchase distressed assets from financial institutions in a bid to thaw frozen credit markets and to get banks to resume more normal lending operations.
Before yesterday’s meeting, Mr Darling warned that it was “essential” that the world’s leading economies took action to stabilise financial markets.
He said it was not enough to “just talk about these things”.
“This is a genuinely global problem and we, all of us, all over the world, need to step up to the mark and do something about it,” he told the BBC yesterday.
“I believe that governments can make a difference, they will make a difference provided that we agree to act together.
“We are going through a very, very turbulent time, a very difficult time, and it’s essential, especially at this time when you have got a problem like this, that governments across the world, particularly the largest economies meeting here this weekend are prepared to do whatever it takes.
“There is a range of things that need to be done. The critical thing is that we don’t just talk about these things, we actually get on with.”
<-- BACK TO STORY