Asian, European leaders back moves for global financial reform

BEIJING, Oct. 24 Kyodo - Asian and European leaders on Friday backed moves for major reforms to the
international financial system amid the continuing global economic crisis.
More than 40 heads of state and leaders gathered at an Asia-Europe summit in
Beijing, including Japan's Prime Minister Taro Aso, released a statement saying
they want to push for improvements to the governance and regulation of
financial markets around the word.
''Leaders were of the view that to resolve the financial crisis it is
imperative to handle properly the relationship between financial innovation and
regulation to maintain sound macroeconomic policy. They recognized the need to
improve the supervision and regulation of all financial actors, particularly
their accountability,'' the statement said.
The summit statement also said the leaders supported U.S. plans to convene a
summit of the Group of 20 economies in Washington next month and other moves to
''address the current crisis and principles of reform of the international
financial system.''
French President Nicolas Sarkozy had earlier told the summit that initial
discussions on how to reform the way markets operate would start at the summit
to be hosted by President George W. Bush on Nov. 15.
Sarkozy said he hopes it would give Asian countries the opportunity to join
Europe and the United States in saying to the world that the causes of the
financial crisis will never be allowed to happen again.
The G-20 comprises Argentina, Australia, Brazil, Britain, Canada, China,
France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia,
South Africa, South Korea, Turkey, the United States and the European Union.
European leaders, including British Prime Minister Gordon Brown, have said in
recent weeks that a culture of excessive risk taking in financial markets and
poor financial oversight and governance have contributed to the current
financial crash.
Chinese President Hu Jintao had earlier told the summit that the subprime debt
crisis in the United States had sent shockwaves around global financial markets
and countries must work more closely to weather the crisis.
''In the face of this unprecedented global challenge, the international
community must enhance policy coordination and have a common purpose,'' he
said. ''At this crucial time, confidence is more important than anything
else.''
Hu said China's economy is sound, but the collapse in confidence in the banking
system and the threat of recession in other regions of the world are having a
major impact on his country's economic prospects.
''The global financial crisis has noticeably increased the uncertainties and
factors for instability in China's economic development,'' he said. ''We are
now faced with many difficulties and challenges in our economic endeavor.''
European Commission President Jose Manuel Barroso told delegates that a radical
rethink of the way financial markets are allowed to operate is needed to
prevent future excessive speculation.
''Just as we should strive for open societies, governed by the rule of law, so
we must work to have open markets, but markets with rules. The interdependence
of today's globalized world requires us to work together to set up these
principles and rules,'' he said.
Japan, China, South Korea and members of the Association of Southeast Asian
Nations agreed earlier on Friday, before the stummit opened, to boost an
emergency pool of funds available to member countries whose currency comes
under attack on financial markets.
The Sultan of Brunei, Haji Hassanal Bolkiah, told the summit that members of
ASEAN and other Asian countries have to pull together and learn from the
lessons of the previous financial crash in the region in the 1990s to weather
the current storm.
State leaders have held a series of bilateral meetings on the sidelines of the
summit, including Aso's talks with Hu and with Chinese Premier Wen Jiabao.
Japanese officials say the Chinese leaders agreed to a proposal to set up a hot
line between the two governments to help further improve high-level
communication between the two sides.
The prime ministers of Thailand and Cambodia also met on the sidelines of the
summit and agreed to resolve a violent border dispute bilaterally rather than
through outside help.
The Asia-Europe summit, due to end Saturday, will also see discussions about
climate change, energy policy and sustainable development, although Japanese
diplomatic sources have told Kyodo News that few breakthroughs are expected in
these areas as the focus of the meeting is dominated by the global financial
crisis.
The first ASEM meeting was held in Bangkok in 1996 as a way of increasing
contact between governments on the two continents. The event is held every two
years.
==Kyodo