Bush backs EU plan on global financial reform

The three politicians said they would approach other world powers - both from the richest nations and the newly emerging economies such as China and India - and try to reach "agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future."

Later summits will be "designed to implement agreement on specific steps to be taken to meet those principles," the trio said in a joint statement.

The top-level talks are due to tackle controversial elements of the current financial order which are seen by some as having contributed or failed to prevent the credit crunch, which originated in the US and spread across the globe.

At the EU level, several such issues have been highlighted as the possible targets of stricter regulation - rating agencies, tax havens, hedge funds, executive pay but also the very role of key global institutions, the International Monetary Fund and World Bank.

"We believe in the capacity and the ability of the American people to come up with the answers the world is waiting for, is expecting. Because this sort of capitalism is a betrayal of the capitalism we believe in," Mr Sarkozy said, newswires report.

"The meeting should be held rapidly, perhaps before the end of November. Since the crisis started in New York, maybe we can find the solution in New York," he added.

However, US president Bush stressed that "as we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism - the commitment to free markets, free enterprise and free trade."

"We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and held millions of people escape poverty around the world."

More European banks in the red

Meanwhile, Dutch ING and French Caisse d'Epargne have joined the list of banks affected by the financial crisis.

The Dutch government agreed on Sunday (19 October) to pump €10 billion into financial group ING, with the bank's management agreeing to scrap executive bonuses and its year-end dividend to shareholders.

The move followed a round of tense negotiations over the weekend sparked by recent share falls by over a 25 percent of value, Reuters reported.

The financial injection by the Dutch government is part of €20 billion package the Hague had put aside for possible bank bail-outs, in a move agreed in principle by all other European member states last week in a bid to prevent a bankruptcy of any financial situation essential for a country's whole economy.

In Germany, Bavaria's public sector bank BayernLB will be the first to use the German government's €500 billion rescue package. The bank's supervisory board is due to meet on Tuesday (21 October) to discuss the package, Bavarian state Finance Minister Erwin Huber said in an interview for Bild newspaper.

In France, the chairman of Groupe Caisse d'Epargne and two other top managers resigned on Sunday, following a €600 million trading scandal where a small team of traders had placed illicit bets on stock markets.

The French government reacted by suggesting a special audit of all banks in the country.