US lawmakers have “taken leave of their senses” by rejecting a $700 billion financial bailout plan, European Union Trade Commissioner Peter Mandelson said on Monday.
The US House of Representatives earlier voted against the plan to help the financial industry in a shock vote that sent global markets sliding and led to recriminations between Republicans and Democrats. “I feel they’ve taken leave of their senses and I hope that in Europe we will not see politicians and parliamentarians replicating the sort of irresponsibility and political partisanship that we have seen in Washington,” Mandelson said in an interview with the BBC.
Mandelson said the EU’s executive Commission would propose measures to reinforce cooperation among regulators, bankers and governments and to clarify the role of credit rating agencies. But he said a broader international response to the global financial crisis was needed. He said French President Nicolas Sarkozy, British Prime Minister Gordon Brown and German Chancellor Angela Merkel had all contacted US President George W. Bush in the last few days to urge him to call an international conference to put in place institutional reforms and regulatory changes. Sarkozy called last week for a summit of world leaders in November to examine ways to overhaul the financial system.
The American banking system would never be the same again after the crisis, Mandelson said. “The American banking system is going to have to reinvent itself... It’s going to be consolidated, it’s going to operate in a different way, it’s going to have to operate with more responsibility, less risk,” he said. (Reuters)