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The failed attempts on Wall Street over the weekend to save Lehman Brothersundefined from bankruptcy and the surprise acquisition of Merrill Lynch (MER) by Bank of America (BAC) - Get Free Report , a merger deal that came at the behest of government officials, sent the U.S. stock market into a tailspin Monday.

Sen. John McCain (R., Ariz.) and Sen. Barack Obama (D., Ill.) offered distinct reactions to crisis, offering insight into how each might handle a financial crisis as president.

Neither campaign said much last week about the crisis gripping Wall Street - not after the Treasury's weekend bailout of mortgage giantsFannie Maeundefined and Freddie Macundefined nor after financial bellwethers like Lehman and AIG (AIG) - Get Free Report got hammered heading into the weekend.

The two political campaigns finally awoke to the crisis Monday morning. McCain's campaign issued a press release recognizing the condition of the financial markets:

"The crisis in our financial markets has taken an enormous toll on our economy and the American people -- first the decline of our housing markets followed by the collapse of Bear Stearns, Fannie Mae, Freddie Mac and now Lehman Brothers."

However, while campaigning in Florida, he said definitively: "The fundamentals of our economy are strong."

McCain echoed the statements made by President Bush. Bush said Monday: "I am confident that our capital markets are flexible and resilient and can deal with these adjustments."

So, the question is What McCain would do to resolve the crisis? In the aforementioned statement, the campaign says:

"The McCain-Palin Administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street. We will rebuild confidence in our markets and restore our leadership in the financial world."

Basically, McCain has called for greater transparency in the financial markets. He has vowed to reform Wall Street by bringing greater accountability and simplifying the regulatory structure presently responsible for serving as watchdog of financial markets.

His rhetoric on reform hits the right tone. However, his campaign Web site has no specific plan outlined for reform nor did his campaign respond to email requests for more detail.

However, in a recent Wall Street Journal op-ed, the campaign hinted at their strategy for reform. They would stop any bailout risking taxpayer dollars, putting their faith in the free market. At the time of the Bear Stearns bailout, McCain suggested a bailout didn't make sense, saying it's "not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."

Obama also recognized the effect of the crisis on Americans. In a Monday statement, his campaign said:

"The situation with Lehman Brothers and other financial institutions is the latest in a wave of crises that are generating enormous uncertainty about the future of our financial markets. This turmoil is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments."

His campaign has been calling for specific reform of Wall Street regulations, releasing a comprehensive plan in March. Obama's three-pronged economic plan favors the principles of a free market but with a guiding hand from government. He wants to update regulations and regulate many of the now-unregulated areas of the markets, such as hedge funds and structured investment vehicles.

Obama blasted President Bush and McCain for the lack of regulation that brought the market to the brink of the current crisis:

"I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It's a philosophy we've had for the last eight years -- one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else. It's a philosophy that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises."

His campaign has constantly criticized McCain for being out of touch. Obama has hammered McCain for saying the "economy is strong," denying the reality of what Americans are facing and the actual economic conditions.

The financial crisis has crystallized the positions of the candidates on government's role in crisis. McCain prefers a more laissez-faire attitude allowing the market to take its course, while Obama supports government intervention and wants to modernize Wall Street reform.

For columnist Doug Kass' take on regulation in this crisis, check out Kass: Under-Regulated, Overcompensated.