G8 Leaders: Call for Global WatchdogAgain, the perpetual unanswered call for transparency.
European leaders agreed to co-operate closely in future to help avert another financial crisis spreading across the world.
Mr Gordon Brown said G8 finance ministers would take forward proposals to change the way credit agencies assessed the risk posed by banks and for greater transparency in information published by the banks themselves.
He said: "We are calling for greater transparency to secure better-informed markets. By calling for change in the international institutions we are leading the way for changes that can be made in the course of the year. I am confident we are leading the way for consensus that can be made for big change."
And he warned: "We stand ready to take regulatory action if progress is not made."
The Prime Minister met with French president Nicolas Sarkozy, German chancellor Angela Merkel, Italy's caretaker premier Romano Prodi and EU Commission president Jose Manuel Barroso for three hours of informal talks.
Although the group considers the European economy basically sound, they believe that greater supervision of banks and credit-rating agencies is necessary.
Mr Brown is keen to establish a new global financial watchdog which he believes might have proved invaluable during the credit crunch.
Mr Barroso said: "It is clear that the recent turmoil in the financial markets requires vigilance. What is needed now is action that is both targeted and proportionate. We must not be tempted into protectionism."
The meeting came amid growing concerns of an American recession this year. In a bid to shore up the faltering economy, the US House of Representatives yesterday approved an economic stimulus package worth $146bn (£73bn). The bill, introduced by President George W Bush, now moves to the Senate.
Separately, the International Monetary Fund warned that the risks to the global economy remain on the downside as it reduced its growth forecast for the second time in less than six months. In an unscheduled update to its World Economic Outlook in October, the IMF said it now expects global GDP to reach 4.1pc this year, down from 4.4pc.
For the US, the IMF cut its growth forecast for this year by 0.4pc to 1.5pc and lowered the Eurozone's projection by 0.5pc to 1.6pc.
Today, the US Federal Reserve will decide whether to cut US interest rates further.