Bush Reserved as E.U. Leaders Assert Power in Crisis

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Global Markets Plunge

A wave of selling gutted Asian and European markets on Oct. 24 as dismal corporate profit reports and poor economic news pushed major exchanges to near double-digit percentage losses.

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Charles Freeman, a former Bush administration trade official now at the Center for International and Strategic Studies, said that Brown and other foreign leaders also see the crisis as an opportunity to challenge the United States' role as the leader of world's financial system.

"Sarkozy and Brown and others are attacking a U.S.-led order," Freeman said. "They're saying, 'We have to revamp this thing, and the U.S. is the problem.' "

Foreign leaders are also looking to see who will win the U.S. election, experts said. Neither Sen. John McCain (R-Ariz.) nor Sen. Barack Obama (D-Ill.) has committed to participating directly before moving into the White House.

Some market participants give the administration credit for pushing through the bailout plan and for eyeing foreign proposals with caution. Warren West, head trader at Greentree Brokerage Services in Philadelphia, said it is unclear whether the aggressive action advocated by Brown, Sarkozy and other foreign leaders is better than Bush's response. "I'm not sure if the actions taken internationally are appropriate," West said. "We're moved so far toward socialism that it is hard to say that we should move more into socialism."

Barry Savitz, senior managing partner at Greenwich Prime Trading Group in New York, said it's too early to speculate on whether Bush should be doing more. The administration needs "to get banks freed up from loans and stop housing from going down," Savitz said. "Maybe the U.S. could have done something differently. I'm not sure what they could have done. This is a process that's going to take time."

In New York yesterday, the United Nations convened a meeting of its board of chief executives, including the heads of the International Monetary Fund and the World Bank, to coordinate a strategy for containing the crisis.

U.N. Secretary General Ban Ki-moon urged the IMF and major central banks to set up "substantial standby lines of credit" that can be used to shore up banks in the developing world. A team of economists advising Ban have said that between $500 billion and $1 trillion is required to stabilize these banks.

"We do not yet know whether our efforts to stabilize the financial system will succeed," Ban said. "Too often, in recent weeks, financial leaders have been criticized for being too slow to recognize problems, for doing too little too late. We must act now to prevent today's crisis from becoming worse tomorrow."

Staff writer Dion Haynes and research editor Alice Crites in Washington and staff writer Colum Lynch in New York contributed to this report.