Bush sells free markets, reform of financial regulatory systems

By Hwang Doo-hyong
WASHINGTON, Nov. 14 (Yonhap) -- U.S. President George W. Bush Friday called for
reform of financial and regulatory systems and continuation of free market
principles as the surest way to overcome the current global financial meltdown.
In a welcoming speech to the working dinner of the G20 economic summit at the
White House, Bush also expressed confidence that the financial turmoil will be
solved through international cooperation, though it may take time.
"This problem did not develop overnight, and it will not be solved overnight,"
Bush said in kicking off the unprecedented economic summit of the world's
advanced and major developing countries. "But with continued cooperation and
determination, it will be solved."
Bush said he expected Saturday's summit meeting to focus on "identifying
principles for reforming our financial and regulatory systems, launching a
specific action plan to implement those principles, and reaffirming our
conviction that free market principles offer the surest path to lasting
prosperity."
Bush's remarks came amid concerns that the summit may result in a symbolic
statement rather than concrete plans for reform of the International Monetary
Fund and other financial organizations, as well as the launch of a new
international financial regulatory body to prevent a recurrence of the crisis.
The outgoing U.S. president Thursday dismissed allegations that lack of proper
regulation resulted in the subprime mortgage crisis that subsequently triggered
the global financial meltdown.
"Many European countries had much more extensive regulations, and still
experienced problems almost identical to our own... and we must recognize that
government intervention is not a cure-all," he told a forum in New York. The
remarks echo what many see as Bush's opposition to calls for an international
regulatory body.
South Korean President Lee Myung-bak, French President Nicholas Sarkozy and
several other heads of state have called for sweeping reform of the IMF and are
pressing for the establishment of a new global financial system to keep pace with
recent changes in the global economy.
"The ongoing financial crisis shows the current financial system has not kept up
with changes being made in the finance industry," Lee said in a recent interview.
"Under the new financial transaction environment, it is time for us either to
greatly reform the existing regime or to make a completely new one."
Sarkozy and several other European leaders also called for less dependence on the
U.S. dollar in international trade in an apparent bid to regain European
influence dwarfed by the U.S. since the end of World War II.
China and Russia have joined in discussions with Europe over ways to use their
own currencies in bilateral trade and thus reduce their dependency on the
greenback. South American states are following suit.
China, which has the world's largest foreign exchange reserves at nearly US$2
trillion, has criticized the U.S. for exporting its financial crisis while at the
same time benefiting from a strong U.S. dollar.
Russia, which holds foreign exchange reserves exceeding US$500 billion, has
complained of a sharp devaluation in its currency since the global financial
turmoil erupted.
Bush acknowledged the challenge leaders faced in reaching a consensus on a
resolution to the crisis, saying that tomorrow's discussion would be the "first
in a series of meetings."
White House officials said they expected another round of the G20 meeting to be
held in the first quarter of next year, soon after the launch of the Barack Obama
administration on Jan. 20.
Obama, who earlier said he would not attend the summit as the U.S. has "just one
president at a time," disappointed participants seeking a guarantee of continued
U.S. commitment to the talks. In his place, the U.S. president-elect is sending
former Secretary of State Madeleine Albright and ex-Congressman Jim Leach as his
representatives to the summit.
Bush and his successor have been at odds over ways to address the financial
crisis. Obama has called for more government involvement, including the provision
of an additional economic stimulus package aside from the US$700 billion bailout,
as well as financial aid to struggling U.S. automakers and opposition to pending
free trade agreements with South Korea, Colombia and Panama.
Bush, however, expressed confidence.
"We are here because we share a concern about the impact of the global financial
crisis on the people of our nations," he said. "We share a conviction that by
working together, we can restore the global economy to the path of long-term
prosperity... and the surest path to that growth is to continue policies of free
and open markets."
Bush also thanked the world's leading nations for their cooperation in addressing
the financial crisis.
"Thanks in large part to these decisive measures, global credit markets are
beginning to thaw," he said. "Businesses around the world are regaining access to
essential short-term financing and stability is beginning to return to the
international financial system."
hdh@yna.co.kr
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