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Bush has 'no answer' for financial crisis

10/10/2008

George Bush has failed to outline any new proposals to help soothe worries on world markets, which have suffered for another day.

In an address to the American public the United States president pledged to act aggressively to stop the tide of mass sell-offs.

The Dow Jones slumped down eight per cent moments after opening earlier, mirroring slumps on the FTSE 100 in London and European and Asian markets.

The panic-selling came despite two rescue packages worth $700 billion and £500 billion on both sides of the Atlantic, while central banks announced a coordinated 0.5 percentage point interest rate cut on Wednesday.

Speaking at the White House ahead of a meeting of G7 finance ministers, Mr Bush said: "The US government is acting and will continue to act to add stability to markets.

"Banks... have suffered serious losses," he said. "Creating uncertainty throughout our economy."

"This uncertainty has led to anxiety among our people. And that is understandable - that anxiety can feed anxiety, and that can make it hard to see all that is being done to solve the problem."

He outlined his government's recent moves to confront the crisis – including the controversial $700 billion bank bailout plan, initiatives to reduce the number of repossessions, saver guarantees, support for the commercial paper market, and the pumping of hundreds of billions of dollars into the markets from the Federal Reserve to provide grease to the liquidity crisis.

"The world is sending an unmistakable signal: We're in this together, and we'll come through this together. ," he said.

"The plan we are executing is aggressive. It is the right plan. It will take time to have its full impact. It is flexible enough to adapt as the situation changes. And it is big enough to work.

"This is an anxious time, but the American people can be confident in our economic future. We know what the problems are, we have the tools we need to fix them, and we're working swiftly to do so."

On an already volatile day, the Dow Jones dropped following the White House statement.

At 10:52 EDT (15:52 BST), the index was down 2.79 per cent to 8,340.08 – after dropping on opening, regaining its position and falling once more.