Leaders pledge global finance reform
World leaders vowed to overhaul the global financial system and China on Saturday urged tighter regulation after a week in which recession fears plunged stock markets into freefall.
Asian and European leaders meeting in Beijing promised wide-ranging and effective reforms while UN Secretary General Ban Ki-Moon also called for quick and meaningful change.
"Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems," the 40-member Asia Europe Meeting (ASEM) said in a statement released late Friday.
"They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions."
China's Premier Wen Jiabao on Saturday called for more regulation of the world's financial system.
"We need to draw lessons from this crisis," Wen told journalists after the summit wrapped up.
"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."
Wen confirmed China's participation in a crucial summit in the United States on November 15 aimed at tackling the global financial meltdown.
"We will take an active part in the upcoming international financial summit to be held in Washington DC," he said, without specifying which Chinese leader would attend the meeting of leaders from 20 industrialised and emerging powers.
European Commission President Jose Manuel Barroso told AFP Saturday it was possible to reach "concrete and important" decisions at the Washington summit.
"I see there is an emerging consensus that will make it possible for the Washington summit to come (up) with concrete and important decisions," he said in an interview after the summit in Beijing.
Ban said the Washington meet must address the need for change and joined chief executives of key UN institutions in calling for considered but large-scale reforms.
"The market and regulatory failures that have led to this crisis must be addressed as a matter of urgency," a joint statement from the UN summit said.
"We reaffirm the need for meaningful, comprehensive and well-coordinated reform of the international financial system and pledge our support to this end."
Stock markets provided a grim backdrop to the ASEM meeting, plummeting Friday after a raft of pessimistic corporate and economic news. Tokyo's dizzying 9.6 percent slump spilt over into Europe, where London's FTSE plunged 5.0 percent.
The Dow Jones Industrial Average slumped 312.30 points (3.59 percent) to close at 8,378.95, capping a week when the US blue-chip index dropped more than five percent.
The Saudi stock market, the largest in the Arab world, opened trading on Saturday with a sharp drop of more than nine percent to its lowest point in four years.
The plunge came as finance and economy ministers and central bankers from oil-rich Arab states in the Gulf met for emergency talks in Riyadh to forge a common front to battle the global economic crisis.
Giants of the auto, airline and technology industries took emergency action against the global financial crisis on Friday.
France's PSA Peugeot-Citroen and Renault ordered huge production cuts, while Japan's electronics giant Sony Corp. and Europe's biggest airline Air France-KLM issued profits warnings.
Chrysler LLC, the number three US automaker, said it would cut up to 5,000 white-collar jobs by the end of the year as prospects in the sector grow dimmer.
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 percent -- the highest in more than four years.
Britain's economy shrank by 0.5 percent in the three months to September compared with the previous quarter, official figures showed, marking the first contraction since 1992.
German Finance Minister Peer Steinbrueck predicted the financial crisis would last until late 2009 in an interview to be published Sunday.
"The risk of collapse is far from over. It would be wrong to lift the alarm," he told the Bild am Sonntag weekly.
The 480-billion-euro (610-billion-dollar) rescue package for banks approved by the German government last week would "certainly be needed" through next year and it would take until between 2010 and 2013 for Germany to determine the real costs of the plan, he said.
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