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Economic summit yields principles, but few details

President George W. Bush greets King Abdullah, of Saudi Arabia, on Saturday in Washington.  (Associated Press / The Spokesman-Review)
President George W. Bush greets King Abdullah, of Saudi Arabia, on Saturday in Washington. (Associated Press / The Spokesman-Review)

Group of 20 urges regulations, more equitable voice

WASHINGTON – World leaders who gathered here to tackle the ongoing global financial crisis agreed to a broad range of solutions Saturday but left the details to be worked out until the spring.

The summit of the Group of 20, which represents 19 countries and the European Union, called for a range of new regulations for financial institutions, credit rating agencies and other bodies widely blamed for sparking the gravest global economic crisis in decades.

The summit also demanded that large developing economies, such as Brazil and China, be given more say in the operation of institutions such as the International Monetary Fund that many complain are dominated by the United States and other industrial nations.

Despite the event’s hoopla, a joint declaration issued by the meeting’s participants Saturday afternoon was heavy on generalities, such as the need for more coordinated global action, financial transparency and tighter economic regulations. It gave leaders until the next summit to be held by April to fill in the blanks.

The declaration did list some more immediate priorities, such as creating a supervisory “college” for major cross-border financial transactions and having each country launch a financial sector assessment program that will inspect its regulatory system.

The declaration also called for a system to clear the issuance of credit default swaps, which are insurance policies against bad financial bets now sold in unregulated markets.

The overall message from the summit held at the National Building Museum here was that an overly careless attitude toward financial risk and unregulated, new-fangled financial instruments were the culprits behind the current economic turmoil.

“Weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system,” the declaration read.

President George W. Bush and French President Nicolas Sarkozy called the summit a success while noting that coming up with lasting solutions to the broken global economy will take months if not years.