World leaders pledged rapid action on Saturday to rescue a weakening global economy from the worst financial crisis in over 70 years and agreed to give emerging nations more say in running financial affairs. (UPDATED)
The Group of 20 leaders from major industrialized and developing countries set out plans to toughen oversight for major global banks, study limits on banker pay and try for a breakthrough by year end in global trade talks -- all part of a roadmap to rebuild a financial system crippled by the credit crisis.
Covering eight pages and 47 action items, the document's overarching focus is to establish a series of new safeguards for the fragile and opaque global financial system. Nearly all the efforts are aimed in some way at better flagging risky investment patterns and regulatory weak spots before they bring down companies and then ripple dangerously through entire economies, as has happened in recent months.
To that end, the leaders called for such mundane things as "supervisory colleges" where financial regulators can compare market notes across countries, better cooperation between nations on regulations, the eventual standardization of accounting rules governing how companies can value potentially tricky assets, and new attention to credit-rating agencies.
"We must lay the foundation for reform to help ensure that a global crisis such as this one does not happen again," they said in a statement after their first-ever summit.
The leaders also supported expanding the membership of the Financial Stability Forum, a group that has been examining the causes of the financial crisis and crafting ways to prevent future problems. And the group called for broadening the financial police work of the 63-year-old International Monetary Fund as well as modernizing the institution to better keep pace with the changing economic environment.
They vowed to make progress before a second summit by the end of April.
"There shall be no blind spots," German Chancellor Angela Merkel declared. "There is here a great common will to ensure that such a crisis is not repeated."
U.S. President George W. Bush, the summit host, said he had agreed to the recent $700 billion rescue plan for U.S. financial institutions only after being told the nation was at risk of falling into "a depression greater than the Great Depression".
SUPPORT TO DEVELOPING ECONOMIES
Turkish Prime Minister Tayyip Erdogan, who also attended the summit, said that they discussed support of the IMF and World Bank to developing and under-developed countries and that the communique released during the meeting focused on the continuation of global solidarity.
After completing his meetings in the United States, Erdogan will proceed to Geneva upon an invitation by Spanish prime minister, and attend the inauguration of "dome of Alliance of Civilizations" on Tuesday.