(CNNMoney.com) – President Bush said Monday that the first step toward economic recovery is to stabilize the financial system – and that the government may step in to help financial institutions again the way it did with Citigroup.
"This is a tough situation for America. But we will recover. The first step is to secure our financial system," Bush said after meeting with Treasury Secretary Henry Paulson. "If need be, we're going to make these kind of decisions to safeguard our financial system in the future."
The president said he spoke with President-elect Obama about the decision. "Anytime we're to make a big decision during the transition, he will be informed, as will his team," Bush said.
Watch: Bush promises close cooperation with Obama
Bush's statement came on the heels of one of the worst weeks on Wall Street, and within 12 hours of an announcement that the federal government would step in to help Citigroup, whose shares fell 50 percent last week on a loss of confidence.
The Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation said the federal government would guarantee roughly $300 billion in losses at Citigroup on its troubled assets and inject $20 billion more into the bank. That new capital injection is on top of the $25 billion given to Citigroup weeks ago as part of the $700 billion bailout passed by Congress in October.
The president's comments preceded a news conference to be held by President-elect Obama in which he was to announce his economic team, including New York Federal Reserve President Timothy Geithner as secretary of the Treasury.