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Bush says financial reforms are needed

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WASHINGTON — Responding to Europe's call for aggressive financial changes, the White House said Saturday the U.S. and the European Union share "common ground" in addressing market turmoil.

The Europeans have expressed concern there is little desire in the Bush administration's waning days for a major overhaul of financial regulations. On Friday, EU leaders backed a 100-day deadline for leading economies to decide on financial reforms.

French President Nicolas Sarkozy, who led a special meeting of EU members in Belgium, said the economic crisis required quick agreement on reforms at the Nov. 15 summit in Washington that Bush is hosting of the world's 20 largest industrialized nations and emerging economies.

"We are in an economic crisis," said Sarkozy, who currently is president of the EU. "We have to react and we have no time to lose."

Bush's press secretary, Dana Perino, said in a statement Saturday that the administration shares "common ground" with European leaders about how to respond to the crisis and the need to move ahead on "certain reforms immediately."

Among other things, the EU leaders said they want an early warning system to watch for imbalances in financial markets, make the International Monetary Fund the world's financial watchdog, improve supervision of financial players and close loopholes that let some institutions avoid regulation.

"The United States has long been working to advance a financial markets reform agenda with many other countries," Perino said, adding that many of those actions are reflected in the EU statement.

The White House statement came as Brazil President Luiz Inacio Lula da Silva said emerging economies must have a prominent role in negotiations to fix the troubled financial system because the world's poor are blameless victims of the turmoil.

Finance ministers and central bank presidents from the world's 20 major economies met Saturday in Sao Paulo, Brazil.

France is suggesting bringing emerging economies on board as members of the exclusive Group of Eight club of industrialized nations. Brazil's finance minister proposed the group be expanded to as many as 15 countries, but did not specify which emerging-market nations besides Brazil, Russia, India and China should be allowed to join.

Brazil and other emerging-market nations have complained they do not have sufficient representation at organizations such as the IMF and World Bank. Silva said the G-20 is well-poised to help forge new international finance regulations because it has broad representation from both rich and developing countries.