Bush vows 'Serious global response' to financial crisis

'Global response'
Bush appears with world financial leaders - vows nations will work together.


The crisis: A timeline
A shocking series of events that forever changed the financial markets.
View photos
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. Secretary Treasury Henry Paulson said Friday that the administration may 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.

Pledging to work together
Bush's comments came as finance ministers pledged Friday to work together to stabilize the financial markets, but have yet to announce concrete and coordinated steps.

Meanwhile, the Bush administration is moving forward with a plan to buy stock in financial institutions by using part of the $700 billion rescue plan authorized by Congress on Oct. 3. Treasury Secretary Henry Paulson said Friday the plan would serve to inject much-needed capital into banks and would be open to "a broad array of financial institutions."

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.

Using all the tools
"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.

Bush said Friday that the government's "wide range of tools" included the $700 billion financial bailout, which he called "big enough to work." This 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.

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.