EU leaders Nicolas Sarkozy and Jose Manuel Barroso will meet with US President George W. Bush on Saturday to discuss a reappraisal of the global financial system, but Washington says to expect no policy changes.
US President George W. Bush will meet his French counterpart, Nicolas Sarkozy, whose country holds the rotating EU presidency, Saturday for talks on how to avert future financial meltdowns and whether to overhaul global economic rules, as the worldwide fiscal crisis grows.
Nicolas Sarkozy heads to the president's Camp David retreat along with European Commission chief Jose Manuel Barroso and armed with a mandate from his EU colleagues to push for a top-to-bottom revamp of the world's financial system.
But the White House has preemptively declared that the talks will yield no new policy proposals, nor a date or location for a world leaders summit that the French leader hopes will generate sweeping reforms.
Sarkozy and Canadian Prime Minister Stephen Harper have called for an international summit by the end of 2008 to coordinate an urgent response to the worst financial crisis since the Great Depression.
"The world is confronted by the worst economic and financial crisis since the 1930s. We need to reflect on the stakes, how we arrived here, who is responsible, and what happened," Sarkozy told a summit of French-speaking nations in Canada late Friday.
"And we must draw lessons from it. The world must change," he said.
Fallout from the crisis grew Friday as fresh job losses were blamed on the turmoil and bank chiefs faced a backlash, while stocks closed a tumultuous week with more wild swings.
In the United States, markets were reminded of the root of the problem as data showed construction starts on new US homes slumped an additional 6.3 percent in September to the lowest level since the recession in 1991.
Housing starts fell to an annualized rate of 817,000. That was down 31.1 percent from a year ago in the latest evidence of the bursting of the housing bubble that has ravaged the US economy and led to the global financial crisis.
Unemployment has grown across Europe and the United States with key sectors such as car-makers badly hit. Analysts forecast worsening economic conditions in most advanced economies.
The finance industry's reputation took a new blow in France where Caisse d'Epargne bank said it lost about 600 million euros (800 million dollars) in a trading "incident."
A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss.
Also Friday, Swiss newspapers angrily called on former top managers of banking giant UBS to return bonuses after the bank had to be rescued by the state this week.
"Mr. Ospel, pay back your bonus! Now! Immediately!" screamed the front page of tabloid Blick, referring to former UBS chairman Marcel Ospel, who was forced to resign this year over billions in losses in the US subprime mortgage crisis.
The headline reflects widespread public anger in Europe and the United States about the massive bailout of troubled banks, whose bosses have pocketed millions in bonuses in recent years.
More details emerged Saturday of a package of measures being put together by South Korea to shore up its economy after devastating currency falls and the departure of foreign investors from the local stock market.
Finance Minister Kang Man-Soo is expected to announce an extra 30 billion dollars to help banks, businesses and the currency market when he unveils a package of measures Sunday, South Korea's Yonhap news agency said.
Asia's fourth-largest economy has already taken a series of steps to prop up its currency and ease credit shortages, and Kang has said Seoul was ready to take "preemptive, swift and sufficient" measures to calm the foreign exchange market.
Global stock markets remained choppy on Friday after wild swings in the past week, but most were firm as some analysts said there was evidence of a "bottom" from the market meltdown of the past few weeks.
The London FTSE 100 index surged 5.22 percent, the Paris CAC 40 added 4.68 percent and the Frankfurt Dax finished 3.43 percent up.
On Wall Street, the Dow shed 1.41 percent to close at 8,852.22, capping a week of turmoil that saw the blue-chip index gain 4.7 percent after a horrific 18 percent meltdown the prior week.
Tokyo's Nikkei index finished a volatile week -- in which it soared a record 14.15 percent on Tuesday and fell more than 11 percent Thursday -- five percent higher.
"We are exhausted with the recent violent swings. Honestly, I want to take a little break," said Masatoshi Sato, a broker at Mizuho Investors Securities.
Date created : 2008-10-18