Bush says markets still face serious challenges

18 September 2008 18:44  [Source: ICIS news]

Bush assures public of federal focus on financial crisisWASHINGTON (ICIS news)--President George Bush said on Thursday that financial markets still face serious challenges - even after massive bailout moves by US and foreign central banks - but he promised that Washington would continue stabilisation actions.

 

“As our recent actions demonstrate, my administration is focused on meeting these challenges,” Bush said in a televised statement.

 

“The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence,” he added.

 

At midday on Thursday, the Dow Jones Industrial Average was off by more than 100 points and then eased to a 30-point decline.  The Dow had opened earlier in the day with a jump of more than 130 points. But the Dow's subsequent midday slump was not nearly as precipitous as Wednesday's nearly 450-point dive.

 

Bush noted that in recent weeks federal authorities “have taken extraordinary measures to address the challenges confronting our financial markets”, citing the government’s takeover of secondary mortgage market giants Fannie Mae and Freddie Mac and the Federal Reserve Board’s investment of $85bn (€60bn) in American International Group (AIG) to prevent AIG’s collapse.

 

Bush said that a “disorderly failure of the insurance company AIG [would have been] a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy”.

 

He also cited the Fed’s agreement late on Wednesday with several other central banks to pump nearly $250bn worth of cash liquidity into global money markets.

 

“These actions are necessary and they’re important,” Bush said.  “And the markets are adjusting to them.”

 

Bush cancelled earlier plans to attend a political fund raising event, saying he will stay in the capital “where I will continue to closely monitor the situation in our financial markets and consult with my economic advisors”.

 

He said he spoke earlier today with Treasury Secretary Henry Paulson and that he will meet with him again later on Thursday, apparently to gauge world market reactions to the latest international bailout measures and to consider other options.

 

($1 = €.70)

 

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By: Joe Kamalick
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