Global finance summit to be held in US
Sunday, 19 Oct 2008 19:32
The US president hosted talks with EU leaders at the presidential retreat of Camp David
The United States is to host an international summit to discuss the global financial crisis, president George Bush has announced.
Speaking before talks with French president Nicolas Sarkozy and
European commission president Jose Manual Barroso at Camp David on Saturday, Mr Bush said it was "essential that we work together" on tackling the situation.
The first in a series of summits is due to he held in the US some time after the country's presidential elections on November 4th.
Before meeting with the US president Mr Sarkozy, whose country currently holds the rotating leadership of the European Union, told Canadian newspaper La Presse that better regulation was needed so that a 21st century financial system did not have 20th century methods of oversight.
He told the paper: "The present crisis must push us to rebuild the foundation of capitalism. That implies especially leaving the myth of the omnipotence of the markets... We have to find a new equilibrium between the state and the market."
Speaking at Camp David, the French president declared that hedge funds, tax havens and financial institutions working without supervision and regulation should all be restructured and changed.
"This is no longer acceptable. This is no longer possible... This sort of capitalism is a betrayal of the sort of capitalism we believe in," Mr Sarkozy said.
Mr Bush, on the other hand, suggested that any changes to the global financial system should not undermine the free market.
"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," he said.
A statement released on Saturday said the international summit would seek 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".
And that, "later summits would be designed to implement agreement on specific steps to be taken to meet those principles".
Yesterday's meeting came as the leaders of the UK, US and France continued to explain the rationale for supporting banks with taxpayer's money.
Mr Bush said he would not have supported the bailout of US banks had the exceptional weakness of financial markets not necessitated such action.
He said the US would look into "serious incidents of fraud, abuse in the financial system" and demand strict oversight of the use of taxpayer money.
Writing in the Telegraph on Saturday, Britain's prime minister Gordon Brown criticised the damage caused by the "unbridled" operation of free markets and emphasised the need for the operation of financial systems to be underpinned by values of fairness and responsible risk-taking.
The UK government has announced a £500 billion bailout package for its financial services sector and spent £37 billion on buying stakes in Royal Bank of Scotland, HBOS and Lloyds TSB.
The US has put forward $700 billion (£404 billion) towards buying low-value securities held by banks and also announced that it would spend $250 billion (£144 billion) on buying stakes in the country's largest commercial and investment banks.