YOU ARE HERE: LAT HomeCollections

The World

U.S. to hold international summit on financial crisis

Although the White House has resisted global regulation, Bush says he will welcome world leaders.

October 19, 2008|Richard B. Schmitt | Times Staff Writer

WASHINGTON — President Bush, under pressure from allies, Saturday agreed to host a summit of world leaders before leaving office, to work on responses to the global financial crisis, including more rigorous international oversight of markets.

But Bush, flanked by French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso as he announced the meeting, emphasized his view that toughened financial regulations should respect free and open markets.

"It is essential that we preserve the foundations of democratic capitalism: a commitment to free markets, free enterprise and free trade," Bush said before he and his guests met privately at the Camp David retreat in Maryland.

The summit is expected to convene sometime between the November presidential election and the end of the year, possibly in New York. Sarkozy suggested that it take place there by the end of next month.

A joint statement by the United States, France and the Presidency of the European Commission issued after the meeting said the three men "agreed they would reach out to other world leaders next week with the idea of beginning a series of summits on addressing the challenges facing the global economy."

A first summit would be held to "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future," according to the statement. Later summits would determine steps to be taken to meet the principles.

Bush took no questions in making his announcement and said nothing about the role his successor might play at the summit. But a senior administration official, who was not authorized to speak publicly about the gathering's details, said, "Of course we would be interested in the views of the president-elect and would welcome his input."

The official also left open the possibility that the president-elect, who will take office Jan. 20, would be invited to the summit. That could transform it from a meeting at which Bush, as a lame duck, might be unwilling to agree to significant reforms into a gathering of potentially more consequence.

Sarkozy and Barroso have been outspoken proponents of more sweeping international oversight of markets. European Union leaders concluded their own summit last week vowing to work with other nations toward what Sarkozy called "a new world governance" of finance.

But the Bush administration has been lukewarm to such proposals, saying the United States and other nations must first stabilize their own markets before accepting more worldwide regulation.

U.S. officials also are concerned about giving up a measure of national sovereignty over American banks and agreeing to new rules that would increase the authority of international bureaucrats over policies affecting U.S. citizens.

Nonetheless, Bush said he looked forward to holding the meeting and welcomed hearing "good ideas from around the world." He said leading industrialized nations as well as developing ones, such as China and India, would be represented at the summit.

"Together, we will work to strengthen and modernize our nations' financial systems so we can help ensure that this crisis doesn't happen again," he said.

Sarkozy, British Prime Minister Gordon Brown and other European leaders took the lead in getting government infusions of huge amounts of capital to banks in what amounted to a partial nationalization of the institutions, an approach that the U.S. was slower to embrace.

Despite Bush's cautious remarks about what might come out of the summit, pressure could mount on the U.S. to accept new international reins on its freewheeling commercial system if the world's economic outlook continues to worsen.

Sarkozy, who spoke briefly after Bush, described his vision of "the capitalism of the future."

"It would be wrong to challenge the foundation of market economics," he said. "But we cannot continue along the same lines because the same problems will trigger the same disasters."

Providing few specifics, he said hedge funds "cannot continue operating as they have in the past; tax havens, neither. Financial institutions that are under no supervisory control -- this is no longer acceptable, this is no longer possible."


Los Angeles Times Articles