Washington - President George W Bush on Monday warned it would take some time for the 700-billion-dollar rescue package to help free up credit availability and restore confidence in the financial system.

As stocks plunged more than 5 per cent Monday morning, Bush said the legislation he signed Friday was a "big step toward solving the problem" but recognized that small businesses and consumers were still reeling from the credit crunch.

"Inherent in the strategy of the rescue package is to free up credit," Bush said in Texas. "It's gonna take a while."

The government last week was given broad new powers to buy up the soured mortgage-backed securities at the heart of the credit crisis and take them off of the balance sheets of struggling financial institutions.

But it could take as long as four weeks for auctions to acquire those assets to get underway.

The Dow Jones Industrial Average fell below 10,000 points for the first time in four years Monday morning and stocks around the world plunged as the crisis spread to Europe.

European Union leaders said they would take "all the necessary steps" to ensure the stability of the bloc's financial system in a joint statement Monday.

Finance ministers from the Group of Seven (G7) industrial nations will hold an annual meeting Friday in Washington.

Bush acknowledged more measures were needed in the United States as well, commenting that he expected a tough ride between now and the end of his term in January.

"It's gonna take a while to restore confidence in the financial system," Bush said. (dpa)