ID :
19660
Tue, 09/16/2008 - 12:51
Auther :
Shortlink :
http://m.oananews.org//node/19660
The shortlink copeid
Bush confident on market resilience despite Lehman Brothers bankruptcy By Hwang Doo-hyong
WASHINGTON, Sept. 15 (Yonhap) -- U.S. President George W. Bush expressed confidence Monday that U.S. financial markets will be able to overcome the current turmoil caused by the subprime mortgage crisis, pledging to work to minimize impact of the developments on the whole economy.
"At the White House and throughout my administration, we're focused on them,
and we're working to reduce disruptions and minimize the impact of these
financial market developments on the broader economy," Bush said in a joint
press availability with Ghanian President John Kufuor at the White House.
Bush's remarks came just hours after Lehman Brothers, the fourth biggest
investment firm in the U.S., filed for bankruptcy early in the morning after
talks of a possible bailout or purchase failed to produce an outcome. The talks
involved Treasury Secretary Henry Paulson and Federal Reserve officials.
U.S. officials have been reluctant to get involved in the failure of Lehman
Brothers as they invited criticism among market players by helping another
investment firm, Bear Stearns, earlier in the year and announcing just a week
earlier a US$200 billion bailout package for two ailing mortgage giants, Fannie
Mae and Freddie Mac.
Dismissing moral hazard concerns, Bush and other officials cited at that time the
need to stem "an unacceptable risk to the broader financial system and our
economy."
Over the past weekend, Bank of America announced an agreement to purchase Merrill
Lynch, the biggest brokerage, and the world's largest insurer, AIG, sought fresh
capital, fueling concerns that other financial institutions might follow suit
amid burgeoning losses and falling stock prices after the credit crunch caused by
the mortgage crisis.
"In the short run, adjustments in the financial markets can be painful both
for the people concerned about their investments and for the employees of the
affected firms," Bush said. "In the long run, I'm confident that our
capital markets are flexible and resilient, and can deal with these
adjustments."
Bush said his government was focused on "the health of the financial system
as a whole," noting he has been "in close touch with Secretary Paulson
throughout this weekend and this morning."
"I appreciate the work the Treasury Department and the Federal Reserve and
the Securities and Exchange Commission and major financial institutions here and
around the world are doing to promote stability in the financial systems,"
he said.
Despite efforts by central banks to hurriedly arrange measures to provide
liquidity and issue other ways to stabilize their financial markets, the Lehman
Brothers bankruptcy sent the stock markets in New York and across the world
plummeting, although the major Asian stock markets in South Korea, China and
Japan escaped the havoc as they were closed for their traditional autumn
thanksgiving holidays.
"At the White House and throughout my administration, we're focused on them,
and we're working to reduce disruptions and minimize the impact of these
financial market developments on the broader economy," Bush said in a joint
press availability with Ghanian President John Kufuor at the White House.
Bush's remarks came just hours after Lehman Brothers, the fourth biggest
investment firm in the U.S., filed for bankruptcy early in the morning after
talks of a possible bailout or purchase failed to produce an outcome. The talks
involved Treasury Secretary Henry Paulson and Federal Reserve officials.
U.S. officials have been reluctant to get involved in the failure of Lehman
Brothers as they invited criticism among market players by helping another
investment firm, Bear Stearns, earlier in the year and announcing just a week
earlier a US$200 billion bailout package for two ailing mortgage giants, Fannie
Mae and Freddie Mac.
Dismissing moral hazard concerns, Bush and other officials cited at that time the
need to stem "an unacceptable risk to the broader financial system and our
economy."
Over the past weekend, Bank of America announced an agreement to purchase Merrill
Lynch, the biggest brokerage, and the world's largest insurer, AIG, sought fresh
capital, fueling concerns that other financial institutions might follow suit
amid burgeoning losses and falling stock prices after the credit crunch caused by
the mortgage crisis.
"In the short run, adjustments in the financial markets can be painful both
for the people concerned about their investments and for the employees of the
affected firms," Bush said. "In the long run, I'm confident that our
capital markets are flexible and resilient, and can deal with these
adjustments."
Bush said his government was focused on "the health of the financial system
as a whole," noting he has been "in close touch with Secretary Paulson
throughout this weekend and this morning."
"I appreciate the work the Treasury Department and the Federal Reserve and
the Securities and Exchange Commission and major financial institutions here and
around the world are doing to promote stability in the financial systems,"
he said.
Despite efforts by central banks to hurriedly arrange measures to provide
liquidity and issue other ways to stabilize their financial markets, the Lehman
Brothers bankruptcy sent the stock markets in New York and across the world
plummeting, although the major Asian stock markets in South Korea, China and
Japan escaped the havoc as they were closed for their traditional autumn
thanksgiving holidays.
