World leaders agree on new regulations to better markets

WASHINGTON -- Amid the gravest financial crisis since the Great Depression, international leaders agreed Saturday to develop new regulations to strengthen global markets.

The leaders directed their finance ministers to draft specifics by March 31. Those recommendations will be discussed at a second summit by April 30 to include the next U.S. president, Barack Obama.

Among the proposals that need to be fleshed out: a way to give more countries a say in the operations of the World Bank and International Monetary Fund. Both institutions were created after the last financial summit of this type, the 1944 conference at Bretton Woods, N.H.

Bretton Woods is a landmark because it led to the creation of today's financial system — one imperiled by frozen credit markets, falling stock markets and teetering industries.

In a joint declaration after Saturday's sessions, the participants agreed in principle to an early warning system advocated by German Chancellor Angela Merkel and others that would detect red flags such as the mortgage problems that contributed to the U.S. financial woes.

The declaration calls for "supervisory colleges" of financial regulators around the globe to better detect risky investing. British Prime Minister Gordon Brown had proposed such as a body to oversee the world's 30 largest banks.

The leaders also directed their finance ministers to develop global accounting standards, especially for complex securities, and ways to review executive compensation.

President Bush praised the talks as a successful beginning, in part because world leaders reaffirmed their support for "pro-growth" capitalist policies and free trade.

"A (single) meeting is not going to solve the world's problems," said Bush, official host for the summit of 19 countries and the European Union.

Brown said the world leaders "agreed we must do more."

While Brown and others were pushing for economic stimulus plans, the summit participants stopped short on a commitment to all act at the same time. The Bush administration has not agreed to a stimulus package supported by Obama and Democratic congressional leaders.