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Leaders meet to discuss global financial crisis

US President George W. Bush, right, stands with Australian Prime Minister Kevin Rudd at the start of the G20 summit in Washington on Friday. PHOTO: BLOOMBERG

World leaders prepared to adopt an early warning system for financial calamities, a commitment to tougher accounting rules and other modest steps to try to prevent crises like the one now threatening the livelihoods of billions of people around the globe.

Nearly two dozen leaders dined in extravagance at the White House on Friday in a prelude to negotiations yesterday over how best to wrestle global economies back from the brink of economic disaster.

The leaders were on track to approve measures to make the world financial system more accountable to investors and more transparent to regulators, said diplomatic sources, speaking on condition of anonymity. To do so, the leaders were expected to endorse more effective accounting rules governing how companies value their assets, a weakness seen as partly responsible for the current financial crisis.

A new early warning system would look for signs of burgeoning problems like those in the US housing market and related overuse of mortgage-backed securities. On Friday, the heads of the IMF, the world’s financial firefighter, and the Financial Stability Forum, a group that includes central banks and major financial regulators, said they would cooperate on “early warning exercises” to detect vulnerabilities.

Bush gave Australian Prime Minister Kevin Rudd a less than warm welcome at the White House dinner amid controversy over a leaked conversation between them, a report said yesterday.

Bush “appeared somewhat standoffish” as he greeted Rudd, the Australian Associated Press reported from Washington.

At the heart of the controversy is a claim in an Australian newspaper last month that Bush displayed embarrassing ignorance by asking Rudd in a telephone call about the crisis: “What’s the G20?”

The allegation has been denied by both Canberra and Washington.

“While other world leaders got big smiles and pats on the back from Mr. Bush, the Australian prime minister had to make do with a brief handshake and a relatively stony face from the president as the pair posed for photographers and TV crews,” the report said.
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