Meeting G7, Bush Vows World Economic Fix

(ABC News Photo Illustration)

Paulson Urges Coordinated Global Action

The President's Rose garden speech today marked the 22nd time in 27 days that Bush has publicly spoken about the financial crisis. While Bush prepared for talks, Paulson laid the groundwork with G7 leaders in a marathon of closed door meetings Friday.

After meeting with IMF officials today, Paulson reiterated the need for coordinated, unified action to re-capitalize the troubled financial markets around the world.

"In recent weeks financial market turmoil intensified throughout the world and credit markets froze, causing a chain reaction," Paulson said. "These extraordinary events require a global response and financial officials from around the world are working together, taking action individually and collectively to address these challenges."

Paulson also pressed the IMF to strengthen surveillance on exchange rates, and resist protectionist policies that worsened economic conditions during the Great Depression of the 1930s.

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Paulson admitted that while fast action is necessary to clamp down on the crisis now, long-term solutions would be needed to "promote growth and financial stability" in the future.

"Once we are past this difficult period, we must turn our attention to longer-term reforms to modernize our outdated financial regulatory structure and address other weaknesses," Paulson said.

Reaching Out to World Leaders

This afternoon, IMF officials endorsed the economic plan Paulson crafted with the G7, according to Reuters. The new coordinated plan to unfreeze credit markets emerged after hours of closed door meetings on Friday between Paulson and leaders of the world's wealthiest nations. The Treasury Secretary praised the plan as a first step toward resolving the financial crisis.

"Governments around the world have taken actions to address financial market developments, and international cooperation and coordination has been robust," Paulson said.

In a statement released Friday, G7 finance ministers agreed to support important financial institutions and "take all necessary steps to unfreeze credit and money markets." To that end, Paulson said the US government would do something it hasn't done since the Great Depression -- invest directly in troubled banks in exchange for stock.