U.S. will work with partners on credit crisis: Bush

After a meeting with finance ministers from around the world on Saturday, U.S. President George W. Bush said the world's wealthiest industrialized countries will work together to attack the credit crisis.

"All of us recognize that this is a serious global crisis and therefore requires a serious global response," he told reporters after the gathering of G7 economic leaders.

"I'm confident that the world's major economies can overcome the challenges we face," Bush said, speaking in the Rose Garden outside the White House, joined by officials from Japan, Germany, Britain, France, Italy and Canada.

Bush announced no new strategies to attack the economic woes circling the globe, stressing instead, "We will do what it takes to resolve the crisis and the world's economy will emerge stronger as a result."

The president later made an unexpected visit to the headquarters of the 185-nation International Monetary Fund. With Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke, he participated in a discussion with the Group of 20, which includes rich countries and major developing nations, such as China, Brazil and India.

The IMF said it strongly endorses a plan by the rich nations to fight the global credit crisis. The lending institution said in a statement after a daylong meeting in Washington it has given full support to the action plan approved Friday by wealthy countries.

Its policy-setting panel said the economic crisis is so deep and widespread that it requires excellent co-ordination and a willingness to take bold action.

Saturday was the 21st time in 26 days that Bush has spoken publicly about the credit crisis gripping financial markets and dragging down stock markets.

Wave of selling

The wave of selling sent prices lower in Asia, Europe and Australia on Friday. Canada's main stock index, the S&P/ TSX, lost 16 per cent over the week. In New York, the Dow Jones Industrial Average plummeted more than 18 per cent.

In the Italian newspaper Corriere della Sera, the IMF's chief economist, Olivier Blanchard, said further losses could be expected.

"In a worst-case scenario, governments will need a few more weeks to take the correct measures and the markets could fall another 20 per cent. Then, we'll turn around," he was quoted as saying.

The stock sell-offs stem from fears that banking systems have essentially frozen up around the world — a credit crisis that has led to an escalating series of interventions by the Bush administration and the U.S. Federal Reserve in the United States.

Flaherty calls crisis 'severe'

"Certainly the mood here, I can tell you, is one of uncertainty and serious concern," Canada's finance minister, Jim Flaherty, said Saturday outside the IMF headquarters following his half-hour meeting at the White House.

Although he called the credit crisis "severe and protracted and continuing," Flaherty had reassuring words for Canada, noting the country's economy is expected to enjoy modest growth next year.

"We are on the positive side and it's anticipated by the IMF that we'll have the best economic growth in the G7 next year, albeit it small economic growth — 1.2 per cent," Flaherty said.

At the end of the G7 talks on Friday, Paulson announced his government would push ahead with plans to buy an ownership stake in American banks for the first time since the Great Depression of the 1930s.

He said plan would help a broad array of financial institutions raise desperately needed money.

Paulson said the government's stock purchases would involve non-voting shares, so it would not have power to run the companies.

It was only eight days ago that the U.S. Congress approved a $700-billion US bailout for the financial industry. Media reports say it could take several weeks for the plan to take effect. However, there is speculation the stock-purchase plan could be in place in just a couple of weeks.