Washington World leaders prepared Friday to adopt an early warning system for financial calamities, a commitment to tougher accounting rules and other modest steps to try to prevent future crises like the one now threatening the livelihoods of billions of people around the globe.
Nearly two dozen leaders assembled in Washington on Friday in the largest gathering of its kind here in nearly a decade. They dined in extravagance at the White House in a prelude to a day of closed-door negotiations today over how best to wrestle both large and developing economies back from the brink of economic disaster.
The leaders were on track to approve measures to make the world financial system more accountable to investors and more transparent to regulators, diplomatic sources said. To do so, the leaders were expected to endorse more effective accounting rules governing how companies value their assets, a weakness seen as partly responsible for the current financial crisis.
The sources, speaking on condition of anonymity because leaders had yet to give formal approval to the draft communique, said the emerging agreement also calls for steps to sharpen the world's eyes watching for the kind of dangerous investing that led to the present chaos.
A new early warning system would look for signs of burgeoning problems like those in the U.S. housing market and related overuse of mortgage-backed securities. On Friday, the heads of the International Monetary Fund, the world's financial firefighter, and the Financial Stability Forum, a group that includes central banks and major financial regulators, said they would cooperate on "early warning exercises" to detect vulnerabilities.
Also, a new "college of supervisors" would gather global regulators tasked with scrutinizing the world's largest financial institutions together to compare notes as they seek to spot excessive risk-taking.
Altogether, the U.S. preference for boosting oversight of shaky financial markets seemed to be holding sway over Europe's desire for tougher internationally enforced regulation.
"Billions of hardworking people are counting on us," Bush said on a night when urgent motorcades swept presidents and prime ministers through a dark Washington mist to the White House.
A second summit is envisioned in early spring, after Barack Obama becomes president. The first meeting, called by President George W. Bush, falls in a period of transition that inevitably leaves unclear what actions the U.S. is ready to take in the months ahead.
The president-elect stayed away from the meeting, but designated former Secretary of State Madeleine Albright and former Rep. Jim Leach to represent him in meetings with leaders on the sidelines. They saw the leaders of Argentina, Mexico and South Korea on Friday and had talks scheduled with lower-level representatives from several other nations both Friday and today.
Leaders from Britain, France, Germany, Russia, China and India were among those in Washington.
The summit, meant to be the first in a series, has a two-pronged agenda: Discuss what might still need to be done to turn the world's economies back from the edge of disaster and explore ways to revamp the global financial system's architecture to prevent similar meltdowns in the future.