U.S. President George Bush tried to reassure jittery financial markets Monday as stock prices plummeted after one of Wall Street's largest brokerage houses went bankrupt. VOA's Paula Wolfson reports from the White House.
The president says the latest financial news is troubling, but the underpinnings of the U.S. economy are strong.
"In the short run, adjustments in the financial markets can be painful - both for the people concerned about their investments and for the employees of the affected firms," said President Bush. "In the long run, I'm confident that our capital markets are flexible and resilient, and can deal with these adjustments."
The president's comments came after the investment company Lehman Brothers was forced to file for bankruptcy protection. At the same time, the world's largest brokerage firm, Merrill Lynch, was sold to Bank of America for a fraction of what it was worth just one year ago.
Both firms have been crippled by a series of bad investments related to the troubled U.S. mortgage market.
President Bush says that while he sympathizes with investors and employees of these two financial institutions, his administration is focusing its attention on the overall health of the financial system.
"We are working to reduce disruptions and minimize the impact of these financial market developments on the broader economy," said Mr. Bush.
The man leading the government's efforts to keep the financial markets stable is Treasury Secretary Henry Paulson.
He says the markets are working through a difficult period, but he emphasizes the American people should remain confident in the soundness and resilience of the U.S. financial system.
Paulson says steps have already been taken to ensure order in the financial markets and says he is willing to do more, including action taken in conjunction with officials abroad.
"What we are focused on right now, I think, is the future," said Secretary Paulson. "And the future is stability, orderliness in our financial markets and working through this period and that is what we are doing."
Paulson told reporters Monday that he never gave any consideration to a government bail-out for Lehman Brothers. He said he was not prepared to put taxpayer money at risk to prop up a private company.