George Bush today defended the US central bank's decision to bail out giant insurer AIG and sought to reassure markets that his administration was intent on confronting the growing crisis.

The crisis also shaped the day's talk on the campaign trail, with both candidates seeking to grab the economic situation for their advantage. The economic troubles have shifted the tone of the presidential race, with Barack Obama enjoying a slight resurgence in polling as voters deem him better equipped to manage the ailing economy than Republican John McCain.

Under pressure to respond forcefully to the grim economic news, McCain said today that if he were in power he would the nation's top securities regulator and a former Republican congressman, Christopher Cox.

"The chairman of the [Securities and Exchange Commission] serves at the appointment of the president and, in my view, has betrayed the public's trust," McCain told supporters in Cedar Rapids, Iowa. "If I were president today, I would fire him."

Obama, campaigning in Espanola, New Mexico, mocked McCain's threat.

"I think that's all fine and good but here's what I think," Obama said. "In the next 47 days you can fire the whole trickle-down, on-your-own, look-the-other way crowd in Washington who has led us down this disastrous path. Don't just get rid of one guy. Get rid of this administration. Get rid of this philosophy. Get rid of the do-nothing approach to our economic problem and put somebody in there who's going to fight for you."

Cox, a Bush appointee, attributed McCain's comments to the heat of the campaign. He said the financial crisis was "presenting new challenges on an hourly basis" and that "steadiness and reduction of uncertainty" is what the US and the world needed.

"History will judge the quality of our response to this economic crisis, but now is not the time for those of us in the trenches to be distracted by the ebb and flow of the current election campaign," Cox said in a statement. "And it is precisely the wrong moment for a change in leadership."

As stocks in New York rallied in early trading, partly in response to a coordinated series of moves by central banks around the world to pump money into credit markets, Bush said AIG's failure "could have caused a severe disruption in our financial markets and threatened other sectors of our economy".

The US Federal Reserve seized control of AIG with an $85bn emergency loan in exchange for 80% of the company's stock.

Overnight, the US central bank, known as the Fed, joined central banks across the world in coordinated efforts to maintain liquidity in world credit markets, together making almost $200bn available to lenders.

"The markets are adjusting to them," Bush said at the White House. "Our financial markets continue deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges. The American people can be assured we will continue to act to strengthen and stabilise our financial markets and to reassure investor confidence."

Bush said he spoke this morning with the US treasury secretary, Hank Paulson, and said the two will meet later today. The president, who had not addressed the nation since Monday, said he had cancelled travel plans in order to monitor the markets and consult with advisers. He was to head to Alabama and Florida to raise money for the Republican party and talk energy policy.

The AIG rescue was the fourth taxpayer-funded bailout of the year by the Bush administration, although it is at odds with Bush's free-market ideology and economic policies. Critics of the recent bailouts have said taxpayers should not foot the bill for investors' bad business decisions, and have wondered aloud why AIG and government sponsored mortgage companies Fannie Mae and Freddie Mac won massive government rescues while investment bank Lehman Brothers was allowed to crumble on Sunday.