G-8 announces global summit on financial crisis

By MARTIN CRUTSINGER - AP Economics Writer

Published: October 15, 2008

WASHINGTON - Leaders of the Group of Eight major industrial countries said Wednesday they will meet "in the near future" for a global summit to tackle the financial crisis.

In a joint statement released by the White House, the G-8 leaders said they were united in their commitment to resolve the crisis by strengthening their financial institutions and restoring confidence.

The statement said the leaders of the eight countries — the United States, Japan, Germany, France, Britain, Italy, Canada and Russia — would meet "at an appropriate time in the near future."

The statement indicated that the G-8 nations would include other key nations in the discussions which will be aimed at drafting "an agenda for reforms to meet the challenges of the 21st century."

Earlier on Wednesday, British Prime Minister Gordon Brown said the meeting could be held as soon as November. He said the discussions should include not only the world's richest nations but also such major emerging economies as China and India.

"I believe there is scope for agreement in the next few days that we will have an international meeting to take common action ... for very large and very radical changes," Brown told reporters before a meeting with other European Union leaders for talks in Brussels on the financial crisis.

German Chancellor Angela Merkel and French President Nicolas Sarkozy also called for a G-8 meeting.

Merkel said reform was needed so that "something like this can never happen again" while Sarkozy said the meeting should be held in New York "where everything started." The current financial crisis began more than a year ago with heavy losses sustained by financial institutions in the United States on their investments in subprime mortgages.

Brown said that an overhaul of global financial organizations like the International Monetary Fund and the creation of better rules governing financial markets were "urgently needed so that we can restore confidence."

In a document obtained by The Associated Press, Brown said he wanted banks to rethink how they deal with risk. He also called for strengthened rules covering such issues as the amount of reserves banks must hold to cover potential losses and improving transparency in financial markets.

In their joint statement, the G-8 leaders praised the actions taken by finance ministers and central bank governors of the G-7 countries last Friday when they adopted a five-point action plan to deal the current financial troubles. That plan pledged efforts to keep major financial institutions from failing and to unfreeze credit markets. The G-7 includes all the countries in the G-8 except Russia.

President Bush met with the G-7 officials on Saturday and then later in the day attended a session of the Group of 20 nations which includes the G-7 countries and major emerging markets such as China, India and Brazil.

In the joint statement Wednesday, the G-8 leaders said changes to the regulatory and institutional regimes of the world's financial sectors were needed to "remedy deficiencies exposed by the current crisis."

"We are confident that, working together, we will meet the present challenges and return our economies to stability and prosperity," the leaders said in their statement.

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AP writers Deb Reichmann in Washington and Aoife White in Brussels contributed to this report.

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