Washington - US President George W Bush hailed an agreement by world leaders on Saturday to implement broad reforms to the international financial system without infringing on the free-market principles that are the backbone of the global economy.

"This was a very successful summit," Bush said at the conclusion of an emergency conference in Washington designed to stave off a rapid collapse of the world economy.

World leaders agreed to "substantive" measures Saturday to reform the international finance system to ensure the global economy does not suffer from another crisis caused by faulty loans and risky banking policies, Bush said.

Bush hosted the gathering with the leaders of the world's 20 leading economies from six continents. It marked the first-ever summit meeting of the G20, which has now become the leading bloc for global financial market reform.

Bush cited the "significant actions" countries were already taking to halt an economic slowdown, including massive government interventions in the workings of private financial firms.

"I'm a free market person," Bush noted, "until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression."

Bush said the countries agreed to regulations to bring about more transparency to regain the confidence of investors, and to prevent dubious loans or hidden credit default swaps, but in a way that does not impede economic growth and free markets.

Even though nations' economies were "being hit very hard, there is a common understanding that all of us should protect pro-growth economic policies," Bush said.

US officials expressed satisfaction that all their priorities for the summit had been met - and surpassed - without infringing on free markets or the principles of capitalism.

"In advance of the summit there had been much discussion with regard to this all being an assault on capitalism, the death of capitalism," a senior administration official said. "Quite to the contrary ... there was universal recognition" among leaders that free markets were the best means of encouraging growth.

The US also cited world leaders' commitment not to close their economies to foreign trade. "Just about every single leader" expressed fears over the possibility of protectionism coming out of this crisis, the official said.

Though the crisis began in the United States, administration officials acknowledged that the multilateral approach to confronting the economic downturn was here to stay.

G20 finance ministers will hammer out the specifics for overhauling regulations in the coming months, but US officials said more countries could be included in the next summit.

But while developing countries now have a seat at the table, the US rejected the notion by some other leaders that other smaller groups like the G7 or G8 - which includes only the top advanced economies - should be abolished.

A record default in loans and home mortgages in the United States over the last two years brought about the economic crisis that has since sent Wall Street tumbling. The financial turmoil quickly spread to global markets and prompted calls for an emergency summit to stave off further economic damage. (dpa)