G20 seals trillion dollar deal to combat crisis

By David Ljunggren and Lesley Wroughton

LONDON (Reuters) - World leaders clinched a $1.1 trillion (748 billion pound) deal on Thursday to combat the worst economic crisis since the Great Depression and said financial rules would be tightened to stop it happening again.

U.S. President Barack Obama declared it a "turning point" for the world economy, even though he had won no promises for more government spending to combat a deepening world recession.

French President Nicolas Sarkozy celebrated the waning of the Anglo-Saxon model of lightly regulated capitalism, which many blame for excess that have triggered the crisis.

World stocks rallied on bold action that will help finance emerging markets, though economists cautioned against euphoria.

"We have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this from happening again," Obama told a news conference.

"We've also rejected the protectionism that could deepen this crisis."

G20 leaders from the largest developed and emerging economies ticked off a raft of actions on politically sensitive topics -- -- new rules on bonuses, publishing a blacklist of tax havens that could lead to sanctions, imposing oversight on large hedge funds and on credit rating agencies. The tax havens marked a victory for France and Germany.

Australian Prime Minister Kevin Rudd hailed the actions. "Today's agreement begins to crack down on the cowboys in financial markets that have brought global markets undone."