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WASHINGTON : US President George W Bush and his French counterpart Nicolas Sarkozy are to meet Saturday to discuss how to avert future financial meltdowns and whether to overhaul global economic rules, as the worldwide fiscal crisis grows.
Sarkozy, joined by European Commission chief Jose Manuel Barroso, heads to the storied US Camp David presidential retreat in Maryland, armed with a mandate from his EU colleagues to push for a top-to-bottom revamp of the world's financial system.
But the White House has preemptively declared that the talks will yield no new policy proposals, and no date or location for a world leaders summit that the French leader hopes will generate sweeping reforms.
"The world is confronted by the worst economic and financial crisis since the 1930s. We need to reflect on the stakes, how we arrived here, who is responsible, and what happened," Sarkozy said told the opening a summit of French-speaking nations in Canada late Friday.
"And we must draw lessons from it. The world must change," he said.
Sarkozy and Canadian Prime Minister Stephen Harper called for an international summit by the end of 2008 to coordinate an urgent response to the crisis.
Fallout from the crisis grew Friday as fresh job losses were blamed on the turmoil and bank chiefs faced a backlash, while stocks closed a tumultuous week with more wild swings.
In the United States, markets were reminded of the root of the problem as data showed construction starts on new US homes slumped an additional 6.3 per cent in September to the lowest level since the recession in 1991.
Housing starts fell to an annualized rate of 817,000. That was down 31.1 per cent from a year ago in the latest evidence of the bursting of the housing bubble that has ravaged the US economy and led to the global financial crisis.
Unemployment has grown across Europe and the United States with key sectors such as car-makers badly hit. Analysts forecast worsening economic conditions in most advanced economies.
The finance industry's reputation took a new blow in France where Caisse d'Epargne bank said it lost about 600 million euros (800 million US dollars) in a trading "incident".
A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss.
Also Friday, Swiss newspapers angrily called on former top managers of banking giant UBS to return bonuses after the bank had to be rescued by the state this week.
"Mr. Ospel, pay back your bonus! Now! Immediately!" screamed the front page of tabloid Blick, referring to former UBS chairman Marcel Ospel, who was forced to resign this year over billions in losses in the US sub-prime mortgage crisis.
The headline reflects widespread public anger in Europe and the United States about the bailout of troubled banks, whose bosses have pocketed millions in bonuses in recent years.
In other developments Friday:
-- The Libyan state became the second biggest stakeholder in Italy's leading bank UniCredit as foreign investors showed renewed interest in troubled Western banks amid the global financial crisis.
-- Ukraine said it was negotiating a 14-billion-dollar emergency loan with the International Monetary Fund and Argentina announced it had struck a deal with three foreign banks to renegotiate part of its 150-billion-dollar sovereign debt mountain.
-- British Prime Minister Gordon Brown said in a newspaper column that the financial crisis was a "defining moment" for the world economy and renewed his call for revamped global institutions.
"The old post-war international financial institutions are out of date," he wrote in The Washington Post. "They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies."
Returning to the US economy, Andres Carbacho-Burgos at Economy.com said the latest data on home construction showed the housing market is still looking for a bottom after an unprecedented meltdown.
"With the nation's financial crisis resulting in tighter credit across the board, housing construction will see at least another month of declining activity before picking up," he said.
Global stock markets remained choppy after wild swings in the past week, but most were firm as some analysts said there was evidence of a "bottom" from the market meltdown of the past few weeks.
The London FTSE 100 index surged 5.22 per cent, the Paris CAC 40 added 4.68 per cent and the Frankfurt Dax finished 3.43 per cent up.
On Wall Street, the Dow shed 1.41 per cent to close at 8,852.22, capping a week of ups and downs that saw the blue-chip index gain 4.7 per cent after a horrific 18 per cent meltdown the prior week.
Tokyo's Nikkei index finished a volatile week -- in which it soared a record 14.15 per cent on Tuesday and fell more than 11 per cent Thursday -- five per cent higher.
"We are exhausted with the recent violent swings. Honestly, I want to take a little break," said Masatoshi Sato, a broker at Mizuho Investors Securities.
- AFP/ir
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