US President George W. Bush, flanked by finance ministers from the G7 club of rich countries, said in a closing speech that all agreed on the need for a "serious global response" to the financial crisis.
US President George W. Bush said Saturday after crisis talks with finance ministers from the G7 rich countries that all agreed the world financial meltdown required "a serious global response."
"All of us recognize that this is a serious global crisis and therefore requires a serious global response," Bush said in the White House Rose Garden after the roughly 40-minute meeting.
Reeling from the loss of trillions of dollars of wealth, investors worldwide had pinned their hopes on decisive action from the Group of Seven major industrialized nations. U.S. stocks pared massive losses in a late recovery.
After markets closed, the Group of Seven major industrialized nations said the situation called for "urgent and exceptional action," and pledged to take all necessary steps to unfreeze credit and money markets.
They said that would include using all tools to prevent systemically important institutions from failure and ensuring that banks can raise capital from public and private sources.
Concerted interest-rate cuts by major central banks around the world, individual liquidity injections, a $700 billion U.S. bailout plan, and government plans in Europe to take equity stakes in banks have so far failed to restore investor confidence.
"It all depends on whether the governments can get a grip on this," said Axel Merk, portfolio manager at Merk Hard Currency Fund in Palo Alto, California.
Investors, leading nations and the International Monetary Fund had all clamored for a united front as nose-diving share prices suspended trade on bourses from Indonesia to Austria and emerging market currencies crumbled.
U.S. stocks crawled back in the final hour of trade with the Dow trimming losses to 1.5 percent on a day in which it traded in a 1,000-point range. The eighth straight day of losses left the Dow down 18 percent for the week.
U.S. stocks have lost $2.4 trillion this week and $8.4 trillion in the past year, according to the Dow Jones Wilshire 5000.
The rally only partially resurrected the shares of Morgan Stanley and Goldman Sachs, pummeled when credit rating agency Moody's Investors Service said it might cut their ratings, reviving concerns about the viability of their banking models.
Date created : 2008-10-11