Bush to Host First in Series of Summits on Financial Crisis

By Roger Runningen and Gregory Viscusi

Oct. 19 (Bloomberg) -- The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. 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 meeting yesterday that they will continue pressing for coordination to address ``the challenges facing the global economy.''

The initial summit will seek ``agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future,'' and later meetings ``would be designed to implement agreement on specific steps to be taken to meet those principles,'' the statement said.

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. The meetings are to include developed economies as well as developing nations.

``The first task is to stabilize the financial markets in our own countries,'' Bush said in welcoming Sarkozy and Barroso to the Camp David presidential retreat in rural Maryland. ``Given that the world has never been more interconnected, it is essential that we work together because we're in this crisis together.''

Free Markets

He stressed that any steps to prevent future crises must maintain and strengthen the free-market system.

``It is essential we preserve the foundations of democratic capitalism,'' Bush said.

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.

Sarkozy and Barroso, in separate statements, welcomed Bush's offer to host the first summit.

``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.''

Need for Reform

Barroso said an ``unprecedented level of global coordination'' is needed to address market instability.

``The international financial system -- its basic principles and regulations and its institutions need reform. We need a new global financial order,'' he said.

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

United Nations Secretary-General Ban Ki-moon today offered to host a summit at UN headquarters in New York City by early December.

The leaders decided to pursue a series of summits because the task was too ambitious to be dealt with in a single meeting, White House spokesman Tony Fratto told reporters later.

It was ``a reasonable expectation'' that the first summit would be scheduled for November though ``not necessarily'' in New York, he said. Fratto didn't name a location and said there are numerous logistics hurdles in bringing together ``a large number of countries in a very short time.''

He said it was ``premature'' to say whether a second summit would be held before Bush left office in three months.

Banking Regulation

British Prime Minister Gordon Brown is 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.

Bush, 62, 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. The U.S. hasn't committed itself to the sweeping terms of Europe's agenda, White House press secretary Dana Perino said yesterday.

``There are other countries that are going to have ideas, as well,'' she said.

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