European leaders said the emergency finance summit in Washington was a success, even though the resulting action plan was less drastic than some of their original suggestions.
A follow-up meeting has been called for April
The measures agreed to at the meeting include a call for beefing up regulation of the world's financial system, bolstering government spending to spur economic growth and reforming international financial institutions.
"We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world's financial systems," said the Group of 20 (G20) leaders, which included the world's advanced economies as well as the leading emerging economies. The G20 represents 85 percent of the global economy.
Merkel says summit a success
Merkel wanted to ensure markets are regulated and monitored
German Chancellor Angela Merkel dubbed the conference a "great success," saying that "its main message is that nowhere in the world should there be markets, market participants or even products that do not have to submit to regulations and rules of transparency."
However, the group's final paper did not specify measures to regulate hedge funds, something Merkel has long championed, but which has not resonated with the US government.
The group did commit to using "fiscal measures to stimulate domestic demand to rapid effect," while delegating regulation to "national regulators" instead of organizing a coordinated stimulus package, which British Prime Minister Gordon Brown had been a strong advocate of.
Treading diplomatically, French President Nicolas Sarkozy was careful in Washington not to repeat his recent appeal for a "new capitalism."
US President George W. Bush, who hosted the summit just weeks before the end of his presidency, said the event's aim was to adapt "the financial structures to the realities of the 21st century."
Held in Washington's ornate National Building Museum, the summit was the first time that G20 government chiefs have met together since the organization was established in 1999.
The meeting was held against the backdrop of signs of a further rapid decline in the global economy. Earlier this week, official statistics showed that the 15-member euro zone has slid into a recession, as have a number of its strongest economies.
Different approaches to regulation
Addressing the participants, Bush underlined the differences that had emerged, especially between Europe and the US in the run-up to the summit on the degree of financial market regulation and control.
"I'm a free market person," Bush said, adding that even though nations' economies were "being hit very hard, there is a common understanding that all of us should protect pro-growth economic policies."
Obama's economic team face a tough start to the job
Russian President Dmitry Medvedev said working together with the US to resolve the economic crisis was an opportunity for the two countries to rebuild relations, and added that a new US administration under president-elect Barack Obama offered a fresh chance to improve ties.
"The financial crisis is the common enemy of the US and Russia," Medvedev told a gathering at the Council on Foreign Relations think tank after attending the G20 summit.
Apart from strengthening global financial transparency, accountability and disclosure measures, the meeting ended with the leaders also calling for immediate steps.
Plan for immediate action
These include the creation of a new monitoring mechanism through a system of "supervisory colleges." Under the plan, national regulators would come together to monitor all major cross-border financial institutions.
Finance ministers have been given a deadline of March 31 to hammer out the details of the proposals, prior to a second G20 meeting in April. Obama, who is inaugurated on Jan. 20, will be in office at that time.
Six areas in particular are to be focused on: regulating problematic parts of the financial markets, increasing transparency and reforming "fat cat" compensation practices for executives. They will also examine global accounting norms and the financing needs of international financial institutions.
The IMF faces reform
Finally, the ministers are to look at "comprehensively" reforming top international financial institutions such as the International Monetary Fund and the World Bank to "reflect changing economic weights in the world economy and be more responsive to future challenges."
"Emerging and developing economies," the leaders said, "should have greater voice and representation in these institutions."
The G20 leaders also said they want to "strive to reach agreement this year on modalities" that would lead a successful conclusion to the troubled World Trade Organization Doha Round. The last Doha Round of talks, aimed at boosting global commerce by lowering trade barriers, fell apart in July in Geneva.