Government aid not a cure-all, Bush says

NEW YORK, Nov. 13 (UPI) -- Government intervention is not a universal remedy for the financial malady afflicting U.S. and global markets, U.S. President George Bush said Thursday.

While governments must take steps to ensure the stability of financial markets, "we must recognize that government intervention is not a cure-all," Bush said in an address at the Federal Hall National Memorial in New York. "For example, some blame the crisis on insufficient regulation of the American mortgage market. But many European countries had much more extensive regulations and still experienced problems almost identical to our own.

Because economy is so interconnected globally, "financial turmoil anywhere in the world can affect economies everywhere in the world," Bush said.

The global financial picture is one reason why an international summit of leaders from developed and developing countries was called for this weekend in Washington, Bush said. International financial leaders also will participate.

The summit is expected to be the first in a series of meetings, he said.

"It will focus on five key objectives: understanding the causes of the global crisis, reviewing the effectiveness of our response, developing 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 said.

While some leaders may question the U.S. ability to exert leadership in the global economy, Bush said, "The world can be confident that it will, because our markets are flexible and can rebound quickly from setbacks."