BERLIN (AP) — European leaders backed sweeping new regulations for financial markets and hedge funds at a summit Sunday in Berlin as politicians and nations scrambled to tame the global economic crisis.
German Chancellor Angela Merkel hosted heads of state and finance ministers from Europe's largest economies to try to establish a common European position on economic reforms before an April 2 summit of the Group of 20 nations.
"All financial markets, products and participants including hedge funds and other private pools of capital which may pose a systematic risk must be subjected to appropriate oversight or regulation," Merkel said in a statement released on behalf of the summit members, following the talks.
The statement said top officials from Britain, France, Italy, Luxembourg, Spain, the Netherlands and Czech Republic agreed on seven key points during their one-day meeting in Berlin. Those ideas will be taken up by the European Council on March 19-20, then presented to the G-20 meeting in London.
"A clear message and concrete action are necessary to engender new confidence in the markets and to put the world back on a path toward more growth and employment," Merkel said.
European leaders backed Merkel's call for a "charter of sustainable economic activity" to guide a reduction of economic imbalances and to stabilize financial markets.
The charter would subject all financial market activities around the globe to regulation, including credit rating agencies. Merkel said the charter would be "based on market forces but prevent excess and ultimately lead to the establishment of a global governance structure."
The leaders also agreed to strengthen the IMF.
"The IMF's resources must be doubled to enable it to help its members swiftly and flexibly when they experience difficulties with respect to their balance of payments," Merkel said.
Other key points included stronger safeguards against tax havens and urging banks to keep larger reserves of capital.
"The banks ought to create additional buffers of resources in good times so that they are better equipped for any bad times," Merkel said.
Officials said a final copy of the summit agreement would not be circulated Sunday, in order to allow European Union members not present to view it first.
The G-20 came up with a 47-point agenda on how to handle the global financial crisis in November. The April 2 summit in London aims to build on that plan.
President Barack Obama and leaders from industrial nations and major developing countries such as China, Brazil and India are scheduled to attend the London summit.
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Associated Press Writer Michael Fischer contributed to this report.
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