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 gave Bush a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry. The crisis has rocked financial markets across the world, prompting fears of a worldwide recession.CAMP DAVID, Md. – President Bush, looking for answers to an economic emergency with just three months left in office will host an international summit to discuss ways to fix the world financial system but warned on saturday against reforms 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 presidential retreat.
Bush, meeting with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso, did not announce a date or site for the summit. But Sarkozy suggested it be held in the shadow of Wall Street before the end of November.
"Insofar as the crisis began in New York, then the global solution must be found to this crisis in New York," Sarkozy said.
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 reforms 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 reforming rating agencies and even exploring the future of currency systems. British Prime Minister Gordon Brown, who engineered a British bank bailout that inspired U.S. 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.
Nearing the end of his second term, any U.S. work to reform the global financial system likely will fall to Bush's successor. It's unclear if the summit will be before or after the U.S. presidential election on Nov. 4, or whether the candidates, their representatives or the winner would attend.
Standing outside on a crisp autumn day at the helipad on the secluded 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."
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 gave Bush a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry. The crisis has rocked financial 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 reformed.
"We need a new global financial order," he said. "The European Union and the U.S., 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 reforms 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."
He 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 acceptable," Sarkozy said. "This is no longer possible. ... This sort of capitalism is a betrayal of the sort of capitalism we believe in."