WASHINGTON — The world's major economies reached an agreement Friday on how to measure and prevent the types of dangerous imbalances that contributed to the worst global downturn in seven decades.

The deal was announced in a joint statement issued following a day of talks among finance officials from the Group of 20 rich industrial nations and major emerging markets such as China and Brazil. The effort will monitor countries and prod them to take corrective actions when imbalances in such areas as foreign trade or government debt rise to excessive levels.

French Finance Minister Christine Lagarde told reporters that the agreement is a significant achievement that will maintain the momentum to revive the global economy and prevent future financial crises. France is the head of the G-20 this year.

Lagarde said that in the beginning the monitoring process would focus on seven of the world's largest economies but would eventually be broadened to include all nations in the G-20. She did not identify the seven nations but the expectation was that the group would include the United States, China, Japan, Germany, France, Britain and India.

Much about the monitoring process, however, is still to be determined including whether countries found to have dangerous imbalances will be identified publicly. China in the past has blocked public release of criticism it has received from the International Monetary Fund.

There is also no enforcement mechanism so it is unclear what pressure can be brought to bear on countries found with dangerous imbalances. But officials stressed that just starting the surveillance process represented a huge breakthrough. They said it should help prevent the kinds of imbalances that in the past casued major troubles for the global economy such as the huge investment flows that helped fuel the subprime mortgage crisis in the United States.

"The subprime crisis in the United States — that's exactly the kind of accident we want to avoid in the future," Canadian Finance Minister Jim Flaherty told reporters. "We want to avoid surprises and that's why we need a mutual assessment system."

British Chancellor of the Exchequer George Osborne told reporters that he expected Britain would be cited in the first report next fall for its sizable government deficit. Others suggested that the United States would also be cited in the initial surveillance process for its government deficit, which is projected to hit $1.5 trillion this year. China could be cited for its trade surplus.

The G-20 is composed of the traditional economic powers including the United States, Japan and European nations as well as fast-growing emerging markets including China, now the world's second largest economy, India and Brazil.

After the financial crisis struck in the fall of 2008, the G-20 took over from the G-7 as the preeminent policy setting group for the global economy. The talks Friday were part of three days of discussions and will wrap up Saturday with meetings of the steering committees for the 187-nation International Monetary Fund and the World Bank.

At a summit meeting of leaders in Pittsburgh in September 2009, the G-20 nations agreed to pursue policies to rebalance global growth in which countries such as China and Germany, which run large trade surpluses, would push for less reliance on exports and more domestic-led growth.

At the same time, big deficit countries such as the United States would seek to trim huge deficits in government budgets and trade. The U.S. deficits were seen as a major culprit in the last recession by attracting foreign capital which fueled an unsustainable boom in housing, supported by foreign investments of subprime mortgages that ended up imploding and dragging down the U.S. financial institutions.

But China in particular has resisted the rebalancing program, contending that its trade surpluses and huge reserves of foreign currencies were not too blame for the financial meltdown in Western nations. Beijing also sees the rebalancing effort, which is being championed by the United States, as a backdoor way to bring greater pressure on China to allow its currency to rise in value against the dollar.

The Obama administration and the previous Bush administration have for years campaigned for an appreciation of the yuan as a way to narrow America's record trade deficits with China. Critics contend that Washington has failed to crack down on China's unfair trade practices, such as currency manipulation, a complaint that has drawn more attention at a time of high unemployment in the United States.

The agreement reached Friday will be followed up by more work on the monitoring process to be done by the International Monetary Fund with a goal of having the leaders of the G-20 countries endorse the approach at their meeting in Cannes, France, in the fall.

Russian Finance Minister Alexei Kudrin told reporters a key remaining question will be "whether we make the monitoring mandatory and have sanctions" for failure to address imbalances in a timely fashion.

In addition to the effort to rebalance the global economy, the G-20 discussions also focused on a number of global issues from how to protect poor nations from soaring energy and food prices to launching a coordinated effort to support the government transitions under way in Egypt and Tunisia. The talks also focused on Japan's progress in recovering from a devastating earthquake and tsunami which hit on March 11.

A week after the March 11 earthquake in Japan, the G-7 countries — the United States, Japan, Germany, France, Britain, Italy and Canada — intervened in currency markets to keep the Japanese yen from rising against the dollar. That would have delivered a big blow to Japan's fragile economy by depressing the country's exports.

Japanese Finance Minister Yoshihiko Noda told Geithner during a meeting Friday that Tokyo appreciated Washington's support of a G-7 action to intervene jointly in currency markets to prevent the yen from sharply appreciating against the dollar, a development which threatened Japan's exports and would have been one more blow to the country's fragile recovery. It was the first joint currency intervention by the G-7 since September 2000. (AP)