11-12 briefing article

The White House

For Immediate Release
Office of the Press Secretary
November 12, 2008

The Summit on Financial Markets and the World Economy

James S. Brady Press Briefing Room

3:05 P.M. EST

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Q: On fiscal stimulus, do you expect some sort of statement coming out of the summit that would be supportive of the need for fiscal stimulus? And if that is indeed the case, would that indicate that the administration is actually supportive of what President-elect Obama has called for, which is immediate fiscal stimulus?

And then, secondly, you didn't mention when you ran down the list the issue of limits on executive compensation at financial firms, which certainly the French President has said is an important issue for him.

UNDER SECRETARY McCORMICK: I wouldn't want to pre-judge what would come out of the statement. I was making the point on the stimulus that just in the last week or two weeks, we've seen a lot of activity around stimulus. That's generally been very welcome in places like China, and I think it's probably a significant portion of how countries are thinking about near-term response. So it will be an important topic.

So what comes out of it in terms of how we say we talked about it or how we say the leaders talked about it I think remains to be seen. There will certainly be a discussion, I expect, because I think it's at the front of many minds, including Secretary Paulson and I think the President, about the incentive structures more broadly, that can contribute to excessive risk-taking, and how to have a discussion and a follow-up on that to ensure that firms have in place -- whether it's credit-rating agencies or financial services firms, whatever it might be -- incentive structures that ultimately guard against excessive risk-taking.

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Q: So what about the discussion that your side had with Chinese government? Tell us about the recent discussion. What are the priority issues that will be discussed between the two countries at this summit? And how are you convincing China to keep buying the U.S. Treasury bonds, for example, and even considering to permit Chinese companies to make further investment into U.S. companies? Thank you.

UNDER SECRETARY McCORMICK: Well, we've had a number of discussions with China throughout the last 12 months, and I'd say those have only grown in frequency in the last three or four months. And I think we've had agreement from the very beginning that the United States, working its way through this challenge, and China continuing to grow and be prosperous is very much in our common interest.

When we talked with the Chinese, universally we hear a commitment to continuing to take steps that keeps the Chinese economy growing, and support for the actions that the United States has taken. And so, when you think about Chinese investment, we don't spend time in China saying, we think you should do this or that from an investment standpoint. What we do say is that we think we're taking steps to ensure that our economy continues to grow and be stable and to give investors confidence that we're going to maintain our openness.

And in the particular case of GSE debt, for example -- Fannie Mae and Freddie Mac debt -- the measures we've taken to give debt holders confidence in their investments. So it's been a constructive discussion, I suspect that will continue, and it has been I think one of the positive developments over the last year or so.

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Q: Over here, I just wanted -- the Chinese government question, I don't think I heard you answer that one, of what you're doing to make sure that they keep buying Treasury bonds. And secondly, you've also said that this is the first of many meetings. What sort of time frame do you expect for the next one?

MR. PRICE: Let me answer that one. I expect that -- I mean, it's for the leaders to decide, but I would expect that the leaders would express the view that they would like to get together sometime during the first quarter of 2009.

And I will give you an opportunity to ask a question, unless you want me to respond to GSE before we turn to you.

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END

3:45 P.M. EST