G8 backs financial reform summit

The leaders of the G8 major industrialised nations have agreed to hold a summit with other states to discuss global financial reform.

The move came as French President Nicolas Sarkozy said EU leaders had backed a plan to aid the bloc's banking sector at a summit in Brussels.

UK PM Gordon Brown has called for the rebuilding of the IMF to help regulate the world's financial systems.

Meanwhile, shares across the world have fallen sharply amid fears of recession.

The Dow Jones index in New York sank nearly 8% and shares in Brazil by 10%. There were sharp falls in London and on other European markets.

In a joint statement, the leaders of the G8 countries - the US, UK, France, Italy, Germany, Canada, Japan and Russia - said that changes had to be made to the "regulatory and institutional regimes for the world's financial sectors to remedy deficiencies exposed by the current crisis".

The statement added: "We look forward to a leaders' meeting with key countries at an appropriate time in the near future to adopt an agenda for reforms to meet the challenges of the 21st Century."

Speaking to reporters on Wednesday ahead of the EU summit in Brussels, Mr Brown made an impassioned plea for a global summit to reform the International Monetary Fund (IMF), to help regulate the world's financial systems.

He also called for the creation of an early warning system for the international economy and for more cross-border supervision of multinational financial companies.

At the EU summit, the 27-member bloc rallied behind plans agreed on Sunday by officials from the 15-nation eurozone, AFP news agency quoted French President Nicolas Sarkozy as saying.

The plan includes guarantees on bank deposits to 100,000 euros ($136,760; £77,760) within a year.

The proposal is one of several due to be tabled at the summit, and follows a commitment last week to raise the guarantee level to 50,000 euros.