A united front, but few details on rescue plan

WASHINGTON - Facing a grave global economic crisis, the leaders of 20 countries agreed Saturday to a far-reaching action plan that, over the next 4 1/2 months, would begin to reshape international financial institutions and reform worldwide regulatory and accounting rules.

The leaders, however, kicked many of the hard details down the road for their next summit after President-elect Barack Obama takes office.

Perhaps as important as the steps they took, the leaders of the richest nations -- and some of its fastest-developing -- made clear their recognition of the world's increasingly interconnected financial architecture and the responsibilities that go with it.

"There shall be no blind spots," German Chancellor Angela Merkel declared. "There is here a great common will to ensure that such a crisis is not repeated."

Ending the two-day talks, the leaders released a joint communiqué that was modest in scope but high in hopes.

Covering eight pages and 47 action items, the document's overarching focus is to establish a series of new safeguards for the fragile and opaque global financial system.

Nearly all the efforts are aimed in some way at better flagging risky investment patterns and regulatory weak spots before they bring down companies and then ripple dangerously through entire economies, as has happened in recent months.

To that end, the leaders called for such mundane-sounding things as: "supervisory colleges" where financial regulators can compare market notes across countries; better cooperation between nations on regulations; the eventual standardization of accounting rules governing how companies can value potentially tricky assets, and new attention to credit-rating agencies.

None of the items was splashy, and most would be understandable to few outside of financial experts.

Tellingly, most of the "action" in the leaders' "plan of action" consisted of developing recommendations to approve at their next meeting, which they set for April 30.

"You don't want to put a lot of effort into doing something when you know that the arrival of a next administration might undo all the work you have done," explained David Lewis, an expert on the presidency at Vanderbilt University.

The gathering of the Group of 20 reflected the new balance of power emerging in the aftermath of the financial crisis. Rising global powers such as China, Brazil and India demanded a greater role in elite financial institutions, and the conference's communiqué called for the immediate expansion of the Swiss-based Financial Stability Forum to a "broader membership of emerging economies."

The communiqué said that over time the International Monetary Fund (IMF) and other global institutions "must be comprehensively reformed so that they can more adequately reflect changing economic weights in the world economy."

It also minced no words in outlining the causes of the crisis, blaming "weak underwriting standards, unsound risk-management practices, increasingly complex and opaque financial products and consequent excessive leverage."

The leaders also discussed the shorter-term problem of how to bring their nations' economies back from the brink. Some had pushed ahead of time for a pledge of coordinated new government stimulus spending by each nation. But with President Bush cool to the approach, they only endorsed taking such action "as appropriate."

However, Obama, in the Democratic weekly address Saturday, urged lawmakers to "pass at least a down-payment on a rescue plan that will create jobs, relieve the squeeze on families, and help get the economy growing again."

With Bush on his way out of office, many leaders were clearly looking beyond him and met on the sidelines of the summit with Obama's emissaries. Still, Bush kept an iron grip on the proceedings. His was the only voice heard in any official setting.

The Associated Press, New York Times and Washington Post contributed to this report.