Bush: World coming together

World leaders are coming together to take decisive action to help a faltering world economy rocked by a credit crisis and unnerved by plunging global stock markets, accoring to President Bush.

In a Rose Garden address shortly before 8 a.m., Bush pledged that the economy would emerge stronger as a result of the actions taken by G7 nations.

{mosads}“I'm confident the world's major economies can overcome the challenges we face,” said Bush, backed by Treasury Sectretary Henry Paulson and other G7 finance ministers. “We're in this together. We'll come through this together.”

He said the G7 nations had agreed to a plan of action that would help “systemically important financial institutions and prevent their failure.” He also said countries had agreed to provide “robust protection” for bank deposits and were taking steps to ensure capitol could be raised.

“There have been moments of crisis in the past whens powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different,” Bush said.

Bush also went through the steps Washington has taken to try to calm markets and provide liquidity to the economy, including the $700 billion bailout bill approved by Congress and signed by Bush just more than a week ago.

“These extraordinary efforts are being implemented as quickly and as effectively as possible,” Bush said. “The benefits will not be realized overnight. But as these actions take effect they will help restore stability to our markets and confidence to our financial institutions.”

The speech comes hours after Paulson announced the government would use a portion of the $700 billion to buy equity in financial institutions in order to inject them with cash. Treasury initially had resisted this move, but apparently shifted in response to the markets that have continued to fall since the bailout was approved. Great Britain announced a similar plan this week.

Bush mentioned the purchase of equity as one of the steps the government was taking. He also said G7 leaders would work in cooperation with large developing countries. Finance ministers from around the world are in Washington this weekend for annual meetings of the World Bank and International Monetary Fund.

Behind the scenes, the Bush administration is trying to keep industry leaders and senior members of Congress apprised of its efforts to stabilize the markets and implement the $700-billion financial bailout package enacted this month. The administration convened a conference call Friday afternoon to update lobbyists on the market volatility and the state of the economy, but no new policy initiatives were discussed, according to one participant on the call.

In his weekly radio address on Friday, Bush moved to calm jittery investors after the worst week in the 112-year history of the Dow Jones industrial average.

Bush said the Dow's 22-percent drop over the last eight trading days was "startling," citing "uncertainty" and "fear" as the driving forces behind the steep decline.

Bush said the government is moving on multiple fronts, citing the Federal Reserve's decision this week to cut interest rates, a new program to boost the commercial-paper market, an increase in government-backed insurance for checking and savings accounts, a Securities and Exchange Commission initiative to crack down on manipulation of the stock market and a plan to slow down the rate of home foreclosures.

"In the short term, we'll continue to face challenges," Bush said. "But in the long run, Americans have reason to be confident. We have the strongest and most resilient economy in the world."

Bush said the department would implement the new law to have "maximum impact as quickly as possible." 

"Seven hundred billion dollars is a significant amount of money," Bush said, "and as we act, we will do it in an effective way."

J. Taylor Rushing contributed to this story

This story was updated at 10:39 a.m.