Summit opens with big notions

The White House again warned of the dangers of overeager intervention.

WASHINGTON (AP) — World leaders launched extraordinary summit talks Friday on the economic crisis gripping the globe — searching for ways to limit the current carnage and prevent future calamities. Big talk filled the air, but the results were likely to be more modest.

The most likely outcome at the meeting hosted by President George W. Bush: an effort to sharpen the world’s eyes watching for the kind of dangerous investing that led to the present chaos.

Nearly two dozen foreign leaders came to Washington, with almost as many different plans for action. The summit of leaders from both big industrial nations and developing countries began with an extravagant White House dinner Friday night and was to conclude today after a day of closed-door talks at the stately National Building Museum.

A new “college of supervisors,” made up of financial regulators from many nations, and an early-warning system to detect weaknesses in the financial system — both aimed at raising the oversight and openness of international markets — were among the ideas likely to be included in a joint communique.

Bush has supported those types of ideas in the past, said White House press secretary Dana Perino, hinting that the leaders, whose delegates have been negotiating for weeks, were poised to agree.

The summit, meant to be the first in a series, has a two-pronged agenda: Discuss what might still need to be done to turn the world’s economies back from the brink of disaster and explore ways to revamp the global financial system’s architecture to prevent similar meltdowns in the future.

Fearing a Wall Street plunge if the summit produces little, the White House has been lowering expectations as fast as other nations have been raising them.

“We’ve always said that this is going to be a series of summits; nothing is going to be solved overnight,” Perino said. “But we’re going to get a long way toward moving the ball down the field.”

Separately, the government reported that sales by U.S. retailers fell by a record amount last month, and Federal Reserve Chairman Ben Bernanke hinted at another interest rate cut to encourage consumers. The Dow Jones industrials dropped 338 points.

As leaders poured into the U.S. capital city, Bush warned for the second day in a row of the dangers — in his view — of overeager government intervention. He said “reforms in the financial sector are essential” but strict new regulation of financial firms or products, such as some European leaders have advocated, would crush the global economy instead of protect it.

He got a boost from British Prime Minister Gordon Brown, who used rhetoric similar to Bush’s in talking about a need to keep trade flowing and markets free. “Protectionism is the road to ruin,” Brown told the Council on Foreign Relations in New York.

Brown has been among the leaders pushing for nations at the summit to pledge coordinated stimulus spending worldwide to combat the downturn that is squeezing millions of families and businesses.

Bush, however, cautioned that the billions of dollars being spent already by the U.S. and other countries should be given a chance to work.

“Our actions are having an impact,” Bush said in his radio address today. “Credit markets are beginning to thaw and businesses are gaining access to essential short-term financing. It will require more time for these improvements to fully take hold, and there will be more difficult days ahead, but the United States and our partners are taking the right steps to get through the crisis.”