Stock markets in Asia and Europe also were buoyed by optimism that global efforts to shore up the banking system were taking hold, Reuters reported.
Also Monday, Federal Reserve Chairman Ben Bernanke endorsed another economic stimulus package during his appearance at a House Budget Committee hearing. The Bush administration had been cool to the idea of another round of government stimulus as the federal budget deficit explodes.
Bernanke said at the hearing that the country’s economic problems could last for a while and it was the right time for Congress to consider another package, reported the Associated Press.
White House press secretary Dana Perino told reporters that President Bush would have to see what kind of package Congress proposes.
President Bush met with Sarkozy and Barroso at Camp David in Maryland on Saturday in order to devise a game plan to address international economic woes. The leaders said in a joint statement that the first financial summit would be held in the United States “soon after the U.S. elections” on Nov. 4.
They plan to “review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future,” their statement read.
Just before the meeting, U.N. Secretary-General Ban Ki-moon said he backed the idea of a summit by early December at the latest, according to the Agence France-Presse.
At Camp David, President Bush emphasized the importance of preserving “the foundations of democratic capitalism — the commitment to free markets, free enterprise and free trade.”
“Once calm has been restored, we must avoid at all costs that those who have led us to where we are today should be allowed to do so once again,” Sarkozy said, quoted the AFP.
Sarkozy, whose country currently holds the rotating presidency of the European Union, is seeking to relaunch the Bretton Woods international financial system in an effort to stabilize the marketplace.
Bretton Woods, a town in New Hampshire, was the site where dozens of leaders of the Allied nations that won World War II gathered to establish a postwar global monetary and financial order in a bid to prevent a repeat of the economic troubles of the 1930s.
The Bretton Woods system, which has been in place for the past 60 years, led to the creation of financial bodies such as the International Monetary Fund.
Some of the proposals for change have called for a more effective centralized regulatory system that would ensure, in global financial markets, that investors could rely on the same kind of transparency and consistency of rules that they would look for in their own countries, said David Rothkopf, a visiting scholar at the Carnegie Endowment of International Peace.
Also, since the IMF reflects the structure of the way the world worked in 1945, reform is needed at the level of providing assistance to countries, because countries like China, those in the Persian Gulf, or Russia that are sitting on large sums of money, often don’t have the voting rights that countries such as those in Europe do, he said.
But in the past few days since the idea was floated, some fault lines have started to emerge, said Rothkopf. Some in the United States say a coordinating — rather than a centralized regulatory — capacity is needed. And French officials say the successor institutions or even the IMF need to change the conditions that they impose on borrowers in order to make the institutions more competitive with lenders like the Chinese, he said.
In addition, disagreements will likely erupt over voting shares, voting rights and the management structure in any future organizations, so it may take several years before large-scale reforms take hold, he added.
“It took World War II to get us to the global institutions we’ve had for the past 60 years,” Rothkopf said. “And the real question is whether the crisis that we’re just in the midst of now is going to be a big enough crisis to produce the next set of changes.”