[Public Papers of the Presidents of the United States: George W. Bush (2008, Book II)]
[November 15, 2008]
[Pages 1372-1375]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at the Summit on Financial Markets and the World Economy
November 15, 2008

    Welcome. Good afternoon. We just had a very productive summit 
meeting. Thinking about 3 weeks ago, when I was talking to President 
Sarkozy and Barroso at Camp David--some of you were there--I don't think we 
could have predicted then how productive and how successful this meeting 
would have been.
    The first decision I had to make was who was coming to the meeting. 
And obviously, I decided that we ought to have 
G-20 nations, as opposed to the G-8 or the G-13. But once you make the 
decision to have the G-20, then the fundamental question is, with that 
many nations, from six different continents, who all represent different 
stages of economic development,

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would it be possible to reach agreements, and not only agreements, would 
it be possible to reach agreements that were substantive? And I'm 
pleased to report the answer to that question was, absolutely.
    One of the things we did, we spent time talking about the actions 
that we have taken. The United States has taken some extraordinary 
measures. Those of you who have followed my career know that I'm a free 
market person, until you're told that if you don't take decisive 
measures then it's conceivable that our country could go into depression 
greater than the Great Depression. So my administration has taken 
significant measures to deal with a credit crisis. And then we worked 
with Congress to deal with the credit crisis as well.
    And we're beginning to see some positive results. One of the things 
people around the table were interested in is, are you beginning to see 
the results of your actions? And our credit markets are beginning to 
thaw, having been severely frozen; businesses are beginning to get 
access to short-term credit. It's going to take more time for the 
measures we have put in place to take hold. No question about that. As a 
matter of fact, we just started, for example, on the $700 billion fund, 
to start getting money out to our banks. So it's going to take more 
time.
    But I was pleased to tell the folks around the table that the 
significant actions we've taken are beginning to work. All of us 
committed to continue to work on progrowth economic policies. It's 
phrased different ways--fiscal plans--but the whole point was, was that 
we recognize that, on the one hand, there's been a severe credit crisis, 
and on the other hand, our economies are being hit very hard. And so 
there was a common understanding that all of us should promote progrowth 
economic policy.
    We also talked about broader reforms. So, in other words, the 
discussions were focused on today and what we're doing about it, but 
what are we going to do to make sure it doesn't happen tomorrow.
    One of the key achievements was to establish certain principles and 
to take certain actions for adapting our financial systems to the 
realities of the 21st century. A lot of the regulatory structures that 
are in place were 20th-century regulatory structures. And obviously, you 
know, the financial industry went way beyond them. And the question is, 
how do we establish good regulatory structure without destroying the 
incentive to innovate, without destroying the marketplace?
    Our nations agree that we must make the markets--the financial 
markets more transparent and accountable. Transparency is very important 
so that investors and regulators are able to know the truth. Considered 
improving accounting rules, so that investors can understand the true 
value of the assets they purchase. We agree that we need to improve our 
regulations and to ensure that markets, firms, and financial products 
are subject to proper regulation and oversight.
    For example, credit default swaps, financial products that ensure 
against potential losses, should be processed through centralized 
clearinghouses. That's a significant reform. Heretofore, the credit 
default swaps were traded in over-the-counter, unregulated markets.
    Yesterday the Working Group on Financial Markets, which is obviously 
associated with the White House, announced an initiative to create these 
kinds of clearinghouses. And I know that other nations are working on 
them as well. This process will help expedite credit default swaps and 
other types of instruments not being traded in unregulated, over-the-
counter markets. By bringing greater stability to this important sector, 
we will help with liquidity, but also mitigate risk.
    Third, we agreed that we must enhance the integrity of the financial 
markets. For example, authorities in every nation should take a fresh 
look at the rules governing market manipulation and fraud to make sure 
that investors in all our countries are

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properly protected. We agree that we must strengthen cooperation among 
the world's financial authorities. There was a lot of discussion about 
the International Monetary Fund and the World Bank, for example.
    Leading nations should make regulations consistent. As well, we 
should reform the international financial institutions. Again, these 
institutions have been very important--the World Bank, IMF--but they 
were based on an economic order of 1944. And so, to better--we agreed 
that to better reflect the realities of today's global economy, both IMF 
and World Bank should modernize their governance structures. They ought 
to consider extending greater voter--voting power and representation to 
developing nations, particularly those who have increased their 
contributions to the institutions.
    All this is an important first step. In other words, this is the 
beginning of a series of meetings. People say, ``Well, why don't you 
have one meeting and, you know, call it `Bretton Woods II'?'' Well, 
Bretton Woods I took 2 years to prepare. I don't know what you want to 
call this one, but whatever name comes from this meeting, it took 3 
weeks to prepare. And so it makes sense to come out of here with a firm 
action plan, which we have.
    It also makes sense to say to people that there is more work to be 
done, and there will be further meetings, sending a clear signal that a 
meeting is not going to solve the world's problems. A meeting will help 
begin a process so that we can say over time that we will have a 
regulatory structure in place that will make this less likely to happen 
in the future.
    And so we've directed our finance ministers to work with other 
experts and consult with officials in other economies and then report 
back to the leaders with detailed recommendations. Whatever we do, 
whatever reforms are recommended, we need to be guided by the--this 
simple fact: That the best way to solve our problems and solve the 
people's problems is for there to be economic growth. And the surest 
path to that growth is free market capitalism.
    Leaders at this summit agreed on some other matters of importance. 
One is to reject protectionism and refrain from erecting new trade 
barriers. This is a very important part of this summit. The temptations 
in times of economic stress will be to say: ``Oh, trade isn't worth it. 
Let's just throw up protective barriers.'' And yet that attitude was 
rejected, thankfully. And matter of fact, not only rejected, there is a 
determined effort to see if we can't complete the modalities for Doha by 
the end of December.
    One of the things I stressed as well is that the United States, in 
the midst of this financial crisis, will not abandon our commitments to 
people in the developing world; that the HIV/AIDS initiative known as 
PEPFAR will remain strong and vibrant; that our deep desire to 
significantly reduce malaria deaths in countries on the continent of 
Africa will not be diminished; that our obligation to help feed the 
hungry will not stop; that in the midst of all this turmoil and 
financial crisis, we will meet our obligations. These obligations are in 
our national security interests and our economic security interests, and 
they in--are in our moral interests.
    And so I will tell you that I thought this was a very successful 
summit. And they're going to meet again. I keep saying ``they'' because 
some of you may not have heard yet, but I am retiring. But I told the 
leaders this: That President-elect Obama's 
transition team has been fully briefed on what we intended to do here at 
this meeting. I told them that we will work tirelessly to make sure the 
transition between my administration and his administration is seamless. 
And I told them that I hope he succeeds, that it's good for our country 
that people see a peaceful transfer of power. And I hope it was good for 
them to hear that even though we're from different political parties, 
that I believe it's in our country's interest that he succeed.

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    So I want to thank you for giving me a chance to come and visit with 
you. Thanks for covering this summit. Goodbye.

Note: The President spoke at 2:11 p.m. at the National Building Museum. 
In his remarks, he referred to President Nicolas Sarkozy of France, in 
his capacity as President of the European Council; and President Jose 
Manuel Durao Barroso of the European Commission. The Office of the Press 
Secretary also released a Spanish language transcript of these remarks.