By Andrew McCathie, Chris Cermak and Mike McCarthy Nov 15, 2008, 20:38 GMT
Washington - The world's 20 top economies pledged to better regulate global financial markets and take steps to halt a global economic slide at an emergency summit hosted by US President George W Bush in Washington.
The action plan agreed to at the meeting includes a call for beefing up regulation of the world's financial system and bolstering government spending to spur economic growth at a time when the global economy risks sliding into recession.
'We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world's financial systems,' said the Group of 20 (G20) leaders which includes the world's advanced economies as well as the leading emerging economies.
Winding up the summit, Bush paid tribute to the efforts of the government chiefs in seeking to tackle the world financial crisis that has triggered global market turmoil.
He described the measures agreed at the meeting as 'substantive'.
Held in Washington's ornate National Building Museum, it was the first time that G20 government chiefs have met together since the organization was established in 1999.
The meeting was held against the backdrop of signs of a further rapid decline in the global economy, a stream of bleak quarterly reports from leading companies around the world along with renewed share market turmoil.
Speaking to reporters, Bush said the summit's aim was to adapt 'the financial structures to the realities of the 21st century' with the G20 agreement giving the world's leading emerging economies a greater role on the international economic stage.
But in his comments, Bush also underlined the differences that emerged specially between Europe and the US in the run-up to the summit on the degree of financial market regulation and control.
'I'm a free market person,' Bush said, adding that even though nations' economies were 'being hit very hard, there is a common understanding that all of us should protect pro-growth economic policies.'
Apart from strengthening global financial transparency, accountability and disclosure measures, the meeting ended with the leaders also calling for immediate steps.
XXXX This includes the creation of a new international financial market watchdog with governments called on to establish so-called supervisory colleges for all major cross-border financial institutions.
The colleges would form part of efforts to strengthen the surveillance of cross-border firms and to strengthen cross-border crisis management systems.
Finance ministers have been given a deadline of March 31 to hammer out the details of the proposals agreed to in Washington.
This is to be followed by another summit of the G20 leaders at the end of April, when US president-elect Barack Obama will be in office.
'We are entering a new world,' said French President Nicolas Sarkozy, who is credited with initiating the summit. France also holds the European Union's sixth-month rotating presidency.
Sarkozy told reporters following the summit that many of the concessions made by the US would have been unthinkable just a short time ago.
Moreover, the summit also represents a big win for emerging nations who have been pressing for a bigger role in the world's key economic forums.
This was especially important, since as the advanced economies sink into recession next year, powerhouse emerging economies in Asia, the Middle East and Latin America are likely to be the key pillars of economic growth.
The leaders of major emerging economies have also expressed concern that they could pay an economic price for the crisis which was triggered by a meltdown in the US mortgage market and has rapidly spread around the world.
'Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims,' said Indian Prime Minister Manmohan Singh.
In their summit declaration, the leaders said they were committed to 'comprehensively' reforming top international financial institutions such as the International Monetary Fund and the World Bank to 'reflect changing economic weights in the world economy and be more responsive to future challenges.'
'Emerging and developing economies,' the leaders said, 'should have greater voice and representation in these institutions.'
The leaders also said they want to 'strive to reach agreement this year on modalities' that would lead a successful conclusion to the troubled World Trade Organization Doha round.
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