- The Washington Times - Saturday, November 8, 2008

BRUSSELS | European Union leaders have backed a 100-day deadline for the world’s leading economies to decide urgent global finance reforms, French President Nicolas Sarkozy said Friday.

Mr. Sarkozy, who chaired a special meeting of EU nations, said the financial crisis and economic downturn required a quick deal on an overhaul at a Nov. 15 summit in Washington bringing together leaders of the world’s 20 largest industrialized nations and emerging economies.

“We are in an economic crisis. We have to take this into account,” Mr. Sarkozy said. “We have to react and we have no time to lose.”

“I’m not going to take part in a summit where there is just talk for talk’s sake,” Mr. Sarkozy told reporters after meetings between the heads of the EU’s 27 member nations. “We want to change the rules of the game in the financial world.”

The EU is calling for a second global summit next spring to flesh out changes to the way the world economy is governed. It wants to see far more supervision of big financial companies and is urging governments to jointly monitor them.

President Bush will host the Nov. 15 summit, which President-elect Barack Obama will not attend.

Acknowledging that “we are facing the greatest economic challenge of our lifetime,” Mr. Obama nonetheless reminded the nation and the world in his first post-election press conference Friday that “the United States has only one government and one president, and until January 20th of next year, that government is the current administration.”

Based on the Europeans’ 100-day deadline, the Obama administration would be taking office on day 67, giving it barely a month to help rewrite the rules of global financial regulation. In his press conference, other than noting that “the global financial crisis is increasingly global and requires a global response,” Mr. Obama overwhelmingly focused on domestic economic troubles.

The Europeans want to prevent a repeat of the Wall Street excesses that caused havoc in markets worldwide — and are bringing emerging economies China, India and Brazil on board for talks on shaping a new world economic order.

British Prime Minister Gordon Brown said the Washington talks should be a “decisive moment for the world economy.”

A text agreed to by EU leaders says they want an early warning system that would watch for financial bubbles and prevent “world imbalances” — such as the swelling U.S. trade deficit.

They also suggest making the International Monetary Fund the world’s financial watchdog, giving it more power to curb financial crises, with more money to aid countries in trouble.

The Europeans also want to close loopholes that allow some financial institutions to evade regulation, and ensure supervision for all major financial players, including ratings agencies or funds carrying high amounts of debt.

The leaders in a declaration called for greater transparency in markets that would no longer omit “vast swathes of financial activity from auditable, certifiable accounts.” It also said “excessive risk taking must be overhauled,” a reference to the sale of high-risk debt securities and executive pay that may reward risk taking.

EU leaders will call on the Nov. 15 summit to agree immediately on five principles: submit ratings agencies to more surveillance; align accounting standards; close loopholes; set banking codes of conduct to reduce excessive risk-taking; and ask the International Monetary Fund to suggest ways of calming the turmoil.

Mr. Brown said more oversight of the world’s 30 largest financial groups “can be set up very quickly.” He wants regulators to talk regularly with their counterparts in other nations about banks that operate across the world.

Staff writer David M. Dickson in Washington contributed to this report.

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