The United States and Europe are working to coordinate their response
to the global financial crisis, but U.S. President George Bush says it
will still take time before the economy recovers.
The president spoke about the need for cooperation during a talk on Tuesday to small business owners in the State of Virginia.
He says even though Americans are facing "tough, tough times," the
country will eventually emerge from the crisis with a strong economy.
Earlier, Mr. Bush discussed the financial crisis with leaders of Britain, France, and Italy by phone. Finance ministers from the G-7 nations are set to gather in Washington later this week to discuss economic issues.
European Union ministers are also discussing joint responses to the
financial crisis. Today they tried to ease the concerns of bank
depositors by increasing the size of accounts that are protected by
insurance against bank failures.
Meanwhile, the head of the U.S. central bank says the financial crisis
is hurting economic growth, and easing the threat of inflation.
Many analysts believe that is a signal that the Federal Reserve may
soon try to stimulate the faltering economy by cutting interest rates.
The Fed is also taking other steps to restore the short-term credit
that is crucial to the financial health of many companies. The Fed is
making short term loans by purchasing what is called "commercial
paper." These short-term loans usually come from pools of investment
money, but the price of these loans has been soaring recently.
A rescue plan for U.S. financial institutions was approved on Friday,
and President Bush said investors need to give the 700-billion-dollar
effort time to work.
Global stock markets posted mixed results on Tuesday after Monday's major losses.
On Monday, the best-known U.S. stock index (the Dow Jones Industrial Average) closed
below the 10-thousand mark for the first time in four years. Major U.S.
indexes gained early Tuesday, but were sharply lower in later trading.
European stock markets were mixed at the close of Tuesday's trading,
while a key stock index in Japan finished the day down three percent.