Leaders call for urgent overhaul of financial systems after further stock market falls and panic over the slumping global economy.
World leaders promise financial reforms
Beijing // European and Asian leaders promised major reforms to the global financial system as they wrapped up a two-day summit focused on the economic meltdown. Leaders from the 45 members of the Asia Europe Meeting (ASEM) pledged to work together in comprehensively changing the world's financial architecture and urged the International Monetary Fund to play a larger role in the turmoil. The plea came as the UN secretary general Ban Ki-Moon also called for quick and meaningful change. The Chinese premier Wen Jiabao urged unity between the two regions as they tackled the worst financial crisis since the Great Depression of the 1930s, and called for more regulation of the financial system. "Only through co-operation can we have strength, can we tide over the difficulties," Mr Wen said at the end of the talks. "We need to handle correctly the relationship between financial innovation and regulation. We need financial innovation to serve the economy better, however we need even more financial regulation to ensure financial safety." Mr Wen said quickly stabilising financial markets was crucial, following another horror week around the world that saw share prices plummet. The talks had not been expected to come up with concrete solutions to the crisis, but were seen as a precursor to crisis talks in Washington next month between the world's largest industrialised countries and developing economies. The French president Nicolas Sarkozy, whose country holds the rotating presidency of the European Union, said concrete decisions needed to be taken at the Nov 15 talks. "We have all understood that it would not be possible to simply have a conversation, have a discussion. We need to turn it into a decision-making forum," Mr Sarkozy said. In a statement released late yesterday, the group vowed to overhaul the world's financial systems. "Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems," the statement said. "They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions." Leaders also called on the IMF to "play a critical role" in helping countries most in trouble, should they ask for assistance. The fresh calls for action came after a slew of gloomy corporate and economic news pushed markets into further losses, with Tokyo's dizzying 9.6 per cent slump spilling over to Europe, where London's FTSE plunged five per cent. Wall Street followed other exchanges downwards as mounting evidence signalled that major economies are heading for recession. The Dow Jones Industrial Average slumped 312.30 points (3.59 per cent) to close at 8,378.95, capping a week when the US blue-chip index dropped more than five per cent. Iceland's government said it had asked for $2bn from the IMF, the first Western country to do so since 1976, after the collapse of its banking sector. The IMF said it had tentatively agreed to the loan and announced it had set aside more cash to rescue stricken nations. French auto giants PSA Peugeot-Citroen and Renault ordered huge production cuts, while Japan's electronics giant Sony and Europe's biggest airline Air France-KLM issued profits warnings. In Britain, official figures confirmed the country was about to enter a recession while Turkey's central bank took action to strengthen bank liquidity and prop up its slumping currency. New figures showed industrial confidence in both France and Italy had fallen to the lowest level since 1993. In Spain, the unemployment rate jumped to 11.33 per cent - the highest in more than four years. New figures meanwhile showed Britain's economy shrank by 0.5 per cent in the three months to September, compared with the previous quarter, marking the first contraction since 1992. *AFP