Bush, allies try to calm investors
The president and the world's financial leaders said they would work together.
WASHINGTON - President Bush and the world's financial leaders staged repeated displays of unity yesterday 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 yesterday, 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.
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 M. Paulson Jr. 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 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."
The financial turmoil dominated discussions at the annual meetings of the IMF and World Bank over the weekend. The IMF strongly endorsed a five-point plan put together by the G-7 nations on Friday that 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 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 yesterday.
In his Rose Garden appearance, Bush made a plea for nations to work together to address the crisis, avoiding the protectionist trade strategies that worsened conditions during the Great Depression.
"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together," Bush said. "There have been moments of crisis in the past when powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different."
White House spokesman Tony Fratto said Bush's commitment to collaborative action was repeated and agreed to by every official and minister who took part in a private White House meeting before the statement. Participating in that session with the president were top officials from the other Group of Seven powers - Japan, Germany, France, Britain, Italy and Canada - as well as from the European Union, World Bank and International Monetary Fund.
Bush did not mention any specific action that prompted his call. But Ireland recently moved to guarantee all bank deposits, triggering similar actions in Germany and other countries concerned that nervous depositors would move their bank accounts to Ireland.