World leaders call for reform as markets overpower paper central banks, govts.

BEIJING, October 25, 2008 (AFP) – World leaders vowed Saturday to overhaul the global financial system in the face of recession fears, but US President George W. Bush urged nations to “recommit” to free markets despite economic turmoil.

After a week of growing economic gloom and plunging stock markets, Asian and European leaders meeting in Beijing promised wide-ranging reforms while UN Secretary General Ban Ki-moon also called for quick change.

“Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems,” the 40-member Asia Europe Meeting (ASEM) said in a statement released late Friday.

“They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions.”

China’s Premier Wen Jiabao called for more regulation of the world’s financial system, saying after the summit “we need to draw lessons from this crisis.”

“We need financial innovation to serve the economy better, however we need even more financial regulation to ensure financial safety.”

Wen confirmed China’s participation in a crucial summit in the United States on November 15 aimed at tackling the financi