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Bush vows his team will meet challenges

President George W Bush vows that his administration would meet the serious challenges facing markets amid a fast-deepening global financial crisis.

world Updated: Sep 18, 2008 21:41 IST

President George W Bush vowed on Thursday that his administration would meet the serious challenges facing markets amid a fast-deepening global financial crisis.

"The American people are concerned about the situation in our financial markets and our economy. And I share their concerns," Bush said at the White House.

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

It was the president's first public comments on the global financial turmoil since Monday, when the venerable Wall Street investment bank Lehman Brothers filed for bankruptcy protection, sending markets into a tailspin.

Bush said he had canceled travel plans Thursday to remain in Washington.

"I'll continue to closely monitor the situation in our financial markets, and consult with my economic advisors," he said.

"Our financial markets continue to deal with serious challenges" despite the federal government's "extraordinary" measures to address them in recent weeks, the president said.

The Federal Reserve announced earlier Thursday a massive 180-billion-dollar liquidity line to five other leading central banks to pump cash into the stressed global banking system, and said it was ready to do more.

Bush recounted a litany of steps taken recently by the federal government to ease the crisis, including the nationalization of mortgage finance giants Fannie Mae and Freddie Mac on September 7, the bailout of insurance titan AIG on Tuesday and the creation of new rules aimed at curbing equities speculation on Wednesday.

"This week the Federal Reserve acted to prevent the disorderly failure of the insurance company AIG, a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy," Bush said.

"Yesterday, the Securities and Exchange Commission took action to strengthen investor protections and step up its enforcement action against illegal market manipulation."

The SEC's new rules are aimed at curbing speculative "naked short" sales that aim to profit from falling share prices.

Short sales are designed to profit from a declining share price by an investor or broker arranging a sale of a share he does not own but has been "borrowed" on an agreement to return the share at a future date.

"These actions are necessary and they are important. And the markets are adjusting to them. As our recent actions demonstrate, my administration is focused on meeting these challenges," Bush said.