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World leaders call for international action to combat global financial crisis

World leaders called for international action to combat the global financial crisis, urging cooperation even as the U.S. pressed ahead with unilateral action to stem a credit crunch that has engulfed global markets.

The focus on the dismal economic situation in the United States at the annual U.N. General Assembly ministerial meeting reflected how what began as a mortgage market meltdown in the U.S. has grown to overshadow other issues, such as the threat of terrorism.

French President Nicolas Sarkozy called for the wholesale reform of the global financial system, urging major economic powers to meet before the end of the year to examine the lessons of the crisis.

"Let us rebuild capitalism in which credit agencies are controlled and punished when necessary, where transparency ... replaces opaqueness," Sarkozy said at Tuesday's meeting. "We can do this on one condition, that we all work together in our globalized world."

Although Sarkozy and other leaders insisted on this global approach, U.S. President George W. Bush - in his last speech before the General Assembly - assured officials his government was aggressively working to contain the credit meltdown some fear will undercut development and poverty-fighting efforts.

The Bush administration is working with Congress to come to quick agreement on a $700 billion bailout bill, in addition to other recent actions he called "bold steps" aimed at stabilizing markets and keeping credit flowing.

Bush said he realizes that other nations are watching how the U.S. deals with the financial crisis, and he expressed confidence that Washington will act "in the urgent timeframe required" to prevent broader problems.

He did not ask for any action by other countries.

Sarkozy, who currently heads the European Union - which includes some of Washington's closest allies - insisted on a global solution.

"What is important is that no country, however powerful it may be, can bring an effective answer to the financial crisis on its own, so it would be logical to have it in the format of the G-8, the major eight economies of the world," he said.

Brazil's President Luiz Inacio Lula da Silva, a former labor leader, also called for a global solution to the financial crisis and lashed out at speculators whom he blamed for the "anguish of entire peoples."

"The global nature of this crisis means that the solutions we adopt must also be global," Silva said.

Philippines President Gloria Macapagal Arroyo said "economic uncertainty has moved like a terrible tsunami around the globe, wiping away gains, erasing progress."

"Just when we thought the worst had passed, the light at the end of the tunnel became an oncoming train, hurtling forward with new shocks to the global financial system," she said.

The widespread concerns came on a day when the head of the U.S. central bank, Federal Reserve Chairman Ben Bernanke, warned U.S. lawmakers, that they risk a recession and deepening economic woes if they fail to act on the administration's plan to bail out the financial industry.

At the U.N., the worry about the impact of the credit crisis on the world's most vulnerable nations and peoples was evident.

Addressing more than 120 world leaders and dozens of government ministers at the opening of the meeting, Secretary-General Ban Ki-moon called for global leadership to restore order to international financial markets, make trade concessions and act on climate change.

Ban said he worried that nations are losing sight of the "new reality" - that there are "new centers of power and leadership in Asia, Latin America and across the newly developed world" - and that "in this new world, our challenges are increasingly those of collaboration rather than confrontation."

"The global financial crisis endangers all our work - financing for development, social spending in rich nations and poor, the Millennium Development Goals" to improve life for the poorest," he said.

"If ever there were a call to collective action - a call for global leadership - it is now," Ban said.

"We need to restore order to the international financial markets," he said. "We need a new understanding on business ethics and governance, with more compassion and less uncritical faith in the `magic' of markets. And we must think about how the world economic system should evolve to more fully reflect changing realities of our time."

He urged world leaders to adopt a new trade deal to help developing countries at the Doha review conference later this year.