Bush, Sarkozy to Seek Series of Summits on Financial Crisis

By Roger Runningen and Gregory Viscusi

Oct. 18 (Bloomberg) -- The leaders of the U.S., France and the European Commission today agreed to ask other world leaders to take part in a series of summits on the global financial crisis, with the first held in the U.S. sometime soon after the Nov. 4 presidential election.

President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement after a three-hour meeting at Camp David, the presidential retreat, that they would maintain coordinated steps to solve the crisis in the global economy.

``They 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,'' according to the joint statement issued through the White House.

The leaders of the world's richest nations, and other big economies such as India and China, ``will be consulted about the idea of a first summit of heads of government to be held in the U.S. soon after the U.S. elections,'' the statement said.

Bush, Sarkozy and Barroso pledged to seek ``agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future,'' and there would be later summits ``designed to implement agreement on specific steps to be taken to meet those principles.''

The agenda for the first summit will include ideas on how to prevent future crises in a way that preserves the free-market system, Bush said. ``It is essential we preserve the foundations of democratic capitalism,'' he said. Leaders from both developed and developing nations would be included.

Welcome Invitation

Sarkozy and Barroso, in separate statements, welcomed Bush's invitation.

``We want to work hand in hand with the Americans to create the capitalism of the 21st century,'' Sarkozy said. ``The meeting should be held rapidly, perhaps before the end of November. Since the crisis started in New York, maybe we can find the solution in New York.''

European leaders have pressed to convene an emergency meeting of the world's richest nations, known as the Group of Eight, joined by others such as India and China, to overhaul the world's financial regulatory systems.

``We must reform capitalism so that the most efficient system ever created doesn't destroy its own foundations,'' Sarkozy, 53, said yesterday in a speech to Quebec's National Assembly. Sarkozy represents all 27 nations of the European Union.

Regulations

Sarkozy and Barraso are pressing Bush for a G8 agenda that includes stiffer regulation and supervision for cross-border banks, a global ``early warning'' system and an overhaul of the International Monetary Fund. Talks may also encompass tougher regulations on hedge funds, new rules for credit-rating companies, limits on executive pay and changing the treatment of tax havens such as the Cayman Islands and Monaco.

``There is no liberty without some regulation and stability,'' Sarkozy said yesterday in Quebec at a press conference with Canadian Prime Minister Stephen Harper.

EU members on Oct. 16 backed Sarkozy's proposal for a conference, and United Nations Secretary-General Ban Ki-moon today offered to host a summit at UN headquarters in New York City by early December.

The U.S. hasn't committed itself to the sweeping terms of Europe's agenda. Ideas ``have been brought forward by individual countries,'' White House spokeswoman Dana Perino said at a briefing for reporters yesterday. ``There are other countries that are going to have ideas, as well.''

Conditions

Bush, 62, supports an emergency G8 meeting, but has cautioned that any revamping must not restrict the flow of trade and investment or set a path toward protectionism. The G8 nations are Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

British Prime Minister Gordon Brown is also pushing for greater cross-border oversight of the global financial system. He has said each of the world's top 30 banks should be under the supervision of a panel of regulators from the countries where those institutions do business.

``The reform of the international financial system is not only necessary to prevent a crisis happening again, it is essential to end the current crisis,'' Brown said on Oct. 16.

U.S. Treasury Secretary Henry Paulson and French Finance Minister Christine Lagarde also attended tonight's meeting at Camp David.

To contact the reporters on this story: Roger Runningen at Camp David rrunningen@bloomberg.net; Gregory Viscusi at Camp David at gviscusi@bloomberg.net