CAMP DAVID, Maryland – President George W. Bush, looking for answers to a global 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 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 Saturday 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.
In a joint statement issued after their slightly more than 2 1/2-hour visit, the three leaders said they would contact other nations next week about having a summit in the United States soon after the presidential election, then a series of subsequent summits to address the challenges facing the global economy.
The first summit would focus on progress being made to address the current crisis and "seek agreement on principles of reform needed to avoid a repetition of the problems and assure global prosperity in the future." Later summits, they said, would be designed to implement agreement on specific steps to be taken to meet those principles.
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.
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, retirement accounts 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."
White House deputy press secretary Tony Fratto said in a telephone call with reporters that the president wants to make sure that reforms do not restrict trade, slow down trade liberalization or impede the flow of capital between nations. But he said: "We do need to find ways to increase transparency and ensure that major economies, in particular, have the ability to prevent systematic events like what we're dealing with now."
Fratto said the leaders proposed more than one summit because of the breadth of issues in the financial meltdown and the number of countries involved. He said it was reasonable to assume that the first summit would be in November, after Election Day, but the timing was largely dependent on being able to get leaders from many nations together in a short period of time. He said it would not necessarily be in New York.
The views of the president-elect, be it Republican John McCain or Democrat Barack Obama, would be important in the discussion, but he said he could not say whether the president-elect would attend the first summit.