Investors should brace themselves for a prolonged period of market turmoil, Henry Paulson, the US Treasury Secretary, said yesterday as he held emergency meetings with the Chancellor and the French Finance Minister. Mr Paulson flew to London to discuss the financial crisis with Alistair Darling as markets remained in the grip of anxieties over the continuing toll from the global credit squeeze. Speaking after talks with his counterparts in France and Britain, Mr Paulson insisted that the global economy remained strong despite the seizures in interbank lending, but admitted that the American economy would take a knock from the turmoil. After meeting Christine Lagarde, the French Finance Minister, Mr Paulson said: ‘It will take a while to work through the turbulence in capital markets.’ Mr Paulson acknowledged that bad lending practices were to blame for the present financial crisis, which has been triggered by the high number of American homeowners falling into arrears on their mortgages. However, he added that ‘the whole world, including the US, has benefited from . . . credit availability’. Ms Lagarde had called for new rules to prevent a repeat of the credit turmoil, but Mr Paulson argued that […]