Global Summits Planned to Tackle Economic Crisis

The Bush administration, in earlier statements and policy initiatives, has signaled that it is skeptical of the kind of strong medicine that European leaders are prescribing.

Sarkozy, for instance, has said that regulation should apply to every financial firm and institution and called for heightened restrictions on how executives are paid -- positions that go well beyond those of administration officials.

The French leader's remarks also suggested that tensions are likely between the United States and Europe, where countries have a tradition of deeper government involvement in financial markets.

"The president of the United States is right in saying that protectionism and closing one's borders is a catastrophe," Sarkozy said. "He is right to say that it would be wrong, catastrophic, to challenge the foundations of market economics. But we cannot continue along the same lines because the same problems will trigger the same disasters."

Even among European leaders, there is disagreement over how to respond to the financial crisis. Policymakers are debating whether to implement a continent-wide stimulus package to boost Europe's flailing economy. While Sarkozy has floated the idea of such a plan, British Prime Minister Gordon Brown had opposed it.

Europeans, with the exception of the British, also want to increase regulation of hedge funds, the speculative investment funds backed by wealthy investors. European leaders are also looking to revamp the International Monetary Fund, which was set up at Bretton Woods to help struggling economies and to bridge temporary imbalances of payments by poor nations.

So far, Sarkozy has been more explicit than Bush or other European leaders about aspirations for the summits.

Some of the steps envisioned by Sarkozy and Barroso include a global early-warning system to detect economic distress, IMF reform and stiffer regulation for international banks, hedge funds and credit-rating companies. World leaders may also reconsider the rules governing tax havens such as the Cayman Islands, Sarkozy said.

"This is a worldwide crisis, and therefore we must find a worldwide solution," said Sarkozy, adding later: "We must not give way to fatalism."

Yesterday, U.N. Secretary General Ban Ki-moon offered to host a G-8 summit at the United Nations in New York to discuss the financial crisis.

"I strongly believe that holding the summit at the United Nations, the symbol of multilateralism, will lend universal legitimacy to this endeavor and demonstrate a collective will to face this serious global challenge," he said.

But a White House official said while the president appreciated Ban's comments, the administration has committed to hosting the first summit on U.S. soil.