'Global response'

Bush appears with world financial leaders - vows nations will work together.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: October 11, 2008: 9:59 AM ET
NEW YORK (CNNMoney.com) -- President Bush on Saturday once again tried to reassure a nervous public that world leaders were working together to address what is unfolding as the worst global financial crisis since the Great Depression.

"We recognize that the turmoil in the financial markets is affecting all our citizens," Bush said, standing in front of financial ministers from the world's top economies gathering in the nation's capital. "All of us recognize this is a serious global crisis that requires a serious global response for the good of our people."

The president did not announce any new actions to stem the financial panic gripping the world, but reiterated measures world leaders are taking to strengthen financial systems.

Bush mentioned the latest step being contemplated by the United States - injecting much-needed capital into banks.

Treasury Secretary Henry Paulson said Friday that the administration may use the authority granted in the $700 billion rescue plan enacted on Oct. 3 to take ownership stakes in financial institutions to stabilize and restore confidence in them.

Other countries are also taking action to inject liquidity, protect citizens' savings and strengthen financial institutions in their own nations, he said.

Finance leaders from the world's top economies, the Group of Seven, pledged Friday night to take steps to keep leading institutions afloat, unfreeze credit, ensure banks have enough capital to kick start lending and safeguard depositors' funds and restart the secondary markets for mortgages and other securitized assets.

It's vital that countries work together so that their actions don't undermine others, Bush said, pointing to the emergency interest rate cut enacted this week as an example of a coordinated effort.

He plans to expand discussions beyond the G-7 ministers - representing the United States, Britain, Canada, France, Germany, Italy, and Japan - to the leaders of the G-20 emerging market and industrialized nations, who are also meeting Saturday.

"We're in this together, we'll come through this together," the president said.

But he warned that it will take time to see the results. So far, all the measures world leaders have taken have done little to calm jittery markets.

"The benefits will not be realized overnight," the president said.

Week of fear
The president's remarks cap a week in which fear gripped the financial markets worldwide. The Dow Jones industrial average had its worst week ever, falling just over 1,874 points, or 18%. Wall Street lost roughly $2.4 trillion in market value during the week, according to losses in the Dow Jones Wilshire 5000, the broadest measure of the market.

Since the mid-September collapse of Lehman Brothers sparked the latest chaos in the financial markets, Bush has repeatedly tried to reassure the Americans.

"We can solve this crisis - and we will," said Bush, in a speech at the White House Friday, his 27th commentary on the nation's financial health. "Here's what the American people need to know: The U.S. government is acting, and we will continue to act, to resolve this crisis and return stability to our markets," he said.

The government has started taking a number of steps to attack the crisis, Bush said Friday. These include helping homeowners to refinance into more affordable mortgages; cutting the target for the federal funds rate; unveiling a plan to support the market for commercial paper; and offering government insurance for money market mutual funds.

The plan will authorize the Treasury to buy bad mortgage-related investments from finance companies, unfreezing the credit markets by freeing up banks and finance firms to lend once again.

First Published: October 11, 2008: 8:20 AM ET

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