Sept. 15 (Bloomberg) -- Presidential candidates Barack Obama and John McCain called for stricter regulations as financial woes deepened on Wall Street, while their campaigns exchanged political volleys over the crisis.

Obama, the Democratic nominee, said President George W. Bush's policies have caused ``the most serious financial crisis since the Great Depression.'' He also called for ``modernizing'' regulations at a rally in Grand Junction, Colorado.

McCain, the Republican nominee, vowed to ``clean up Wall Street'' and ``replace the outdated, patchwork quilt of regulatory oversight'' at an event in Jacksonville, Florida. ``We will never put America in this position again,'' he said.

Both candidates were trying to score points with voters looking for reassurance after Lehman Brothers Holdings Inc. became the latest casualty on Wall Street. Barclays Plc and Bank of America Corp. abandoned takeover talks yesterday, forcing Lehman Brothers, the fourth-largest U.S. investment bank, into the biggest bankruptcy filing in history.

``People need to have confidence that the candidates for president have some solutions for the way out of this mess,'' said Democratic consultant Peter Fenn. He said both McCain and Obama will have to provide details on how they would avert any further meltdown in the markets.

More Regulation

Neither man vying to replace Bush offered specific fixes today for the crisis other than calling for more regulation.

Obama, 47, an Illinois senator, consulted this morning with his top economic advisers, including former Treasury Secretary Robert Rubin and former Federal Reserve Chairman Paul Volcker. While his campaign issued a statement early in the morning, Obama didn't speak about the crisis until almost five hours after McCain made his first public remarks in Jacksonville.

McCain's campaign also quickly released a television ad, with shots of the Lehman Brothers and New York Stock Exchange building emblems, that says ``our economy is in crisis'' and ``only proven reformers McCain and Palin can fix it.'' The reference is to McCain's vice-presidential running mate, Governor Sarah Palin of Alaska.

The Obama campaign returned fire, highlighting comments McCain, 72, an Arizona senator, made in Florida about the state of the economy.

Fundamentals Strong?

``People are frightened by these events,'' McCain told several thousand supporters in Jacksonville this morning. ``The fundamentals of our economy are strong, but these are very, very, difficult'' times, he said.

Obama's campaign pounced on the words, alerting reporters where to find a video and calling McCain ``out of touch.'' Democratic vice presidential nominee Joe Biden told supporters in Saint Clair Shores, Michigan, that only McCain thinks great progress has been made under the Bush administration.

``Ladies and gentlemen, I could walk from here to Lansing, and I wouldn't run into a single person who thought our economy was doing well, unless I ran into John McCain,'' Biden said.

At a later appearance in Orlando, Florida, McCain emphasized the strength of the American worker, small businesses and American innovation and entrepreneurism. ``Those are the fundamentals of America and I think they are strong,'' he said.

Americans will be weighing the candidates' words carefully, said Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey. ``One thing Americans look for in times of turmoil is someone who has a vision and someone who looks like they can make it through the turmoil,'' he said.

Trickle Down

An upending on Wall Street will trickle down to many other Americans because of widespread stock ownership, said David Primo, a political science professor at the University of Rochester in New York. McCain may also have a tougher time dealing with the political fallout than Obama, he said.

``The meltdown cuts against Republicans because, rightly or wrongly, they are viewed as the party closest to Wall Street,'' Primo said.

The two campaigns are using similar language to blame both the government and the banks.

``Too many folks in Washington and on Wall Street weren't minding the store,'' Obama said.

Palin told supporters in Golden, Colorado, today that ``Washington has been asleep at the switch'' and ``management on Wall Street has not run these institutions responsibly.''

White House spokeswoman Dana Perino, responding to Obama's attack, said the Bush administration is focusing on the market and economy. ``We will leave the partisan politics and empty rhetoric to others,'' she said in an e-mailed statement.

Treasury Secretary Henry Paulson made a similar remark to reporters. ``I'm not focused on politics right now,'' he said.

Reducing Disruptions

Speaking at the White House, Bush said policy makers are working to ``reduce disruptions'' in the markets. ``In the long run, I'm confident that our capital markets are flexible and resilient and can deal with these adjustments,'' he said.

Lehman, the 158-year-old firm, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The company had lost 94 percent of its market value this year.

Instability in the financial and credit markets left Lehman officials struggling to keep the firm afloat, Ian Lowitt, the firm's chief financial officer, said in a court filing in the bankruptcy case. Liquidity problems plagued Lehman earlier this year, he said.

Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks couldn't survive this year's credit crunch.

The meltdown will be linked to Bush, the Republicans and McCain's support of Republican philosophies, said Stephen Wayne, a government professor at Georgetown University in Washington.

``It is Obama's turn to bat,'' Wayne said. ``Even if he misses, he fans the fires of economic discontent and generates support for the need to change. He may, however, have to change his slogan from `Yes, we can' to `Yes, we must!'''

To contact the reporters on this story: Kristin Jensen in Chicago at kjensen@bloomberg.net; Nadine Elsibai in Washington at nelsibai@bloomberg.net.

Last Updated: September 15, 2008 15:55 EDT