Bush, world leaders try to contain market fallout

By Patrick Worsnip and Matt Spetalnick

UNITED NATIONS (Reuters) - U.S. President George W. Bush and other world leaders scrambled on Tuesday to contain the fallout from a financial crisis engulfing Wall Street and sending shock waves across the globe.

In his farewell speech to the United Nations, Bush offered assurances of his commitment to stabilizing world markets, which are overshadowing international concerns about standoffs with Russia, Iran and North Korea.

But he also faced criticism at the annual General Assembly gathering of world leaders over the excesses of global capitalism that Washington has long pushed as the path to economic prosperity.

"Who is responsible for this disaster? May those who are responsible be punished and held accountable," said French President Nicolas Sarkozy.

Sarkozy called for a summit of world leaders in November to examine ways to overhaul what he said was a "crazy" financial setup at the root of the problem.

Even Iranian President Mahmoud Ahmadinejad -- whose country faced condemnation from Bush over its nuclear ambitions -- joined the fray, saying in a newspaper interview the Wall Street crisis stemmed in part from U.S. military interventions in places like Iraq.

"American empire in the world is reaching the end of its road, and its next rulers must limit their interference to their own borders," Ahmadinejad said as he railed against Iran's foes, the United States and its ally Israel, in his U.N. address.

With Bush leaving office in four months, many world leaders are looking to the November 4 U.S. election and the next president -- Republican John McCain or Democrat Barack Obama.

As the speechifying continued just miles (kms) from Wall Street, intensive efforts were under way in Washington to craft a $700 billion bailout spurred by the worst upheaval in the U.S. financial system since the Great Depression.

"I can assure you that my administration and our Congress are working together to quickly pass legislation approving this strategy, and I'm confident we will act in the urgent time frame required," Bush said.

'MAGIC' OF MARKETS QUESTIONED

In his speech, Sarkozy urged the creation of "a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators."

With investors worried and the meltdown spreading, other economic powers are feeling the pinch. Poor countries fear cuts in the aid budgets of their biggest donors.

U.N. Secretary-General Ban Ki-moon said financial turmoil demands a new approach with less "uncritical faith in the 'magic' of markets."

His words resonated with delegates of leftist governments that have long opposed the free market orthodoxy the Bush administration has advocated.