Boston/London: World leaders set out a $1.1 trillion package to help revive the global economy on Thursday, as a US accounting standards board gave more flexibility to banks carrying the toxic assets that poisoned the international financial system.

G-20 leaders meeting in London also moved to tighten rules on tax havens, hedge funds and credit rating agencies, aiming to ward off future crises, and US President Barack Obama declared the summit a “turning point” for the world.

Stock markets, which had been disappointed by a smaller-than-expected interest rate cut by the European Central Bank and a sharp jump in US jobless claims, surged on the news out of London promising help to struggling national economies and out of Washington offering relief to banks that have been forced to write down billions of dollars.

On Wall Street, the blue-chip Dow Jones industrial average rose 2.8%, The index of top European shares gained nearly 5%. Japan’s Nikkei gained 4.4%. Oil rose nearly 9% to top $52 a barrel.

The Group of 20 leaders from the world’s biggest economies said in a communique that measures agreed in London will raise world output by 4% by the end of next year.

The agreements include a promise to triple the resources of the International Monetary Fund to $750 billion, with $40 billion coming from China - a significant step for the world’s third-largest economy.

A package worth $250 billion over two years will support global trade flows.

The G-20 also agreed to create a financial stability board to provide early warning of systemic economic risks. It agreed to place hedge funds under supervision for the first time.

“Today’s agreement begins to crack down on the cowboys in financial markets that have brought global markets undone,” Australian Prime Minister Kevin Rudd said.

Some economists said the new IMF funds masked the fact that there was no agreement for more fiscal stimulus actions by individual countries, something the United States, UK and Japan wanted but France and Germany strongly resisted.

In the United States, the Financial Accounting Standards Board voted to give banks more flexibility in valuing toxic assets. The changes, to take effect in the second quarter, could reduce writedowns and soften blows to bank earnings.

But the news on the unemployment front continued to worsen.

The number of US workers filing new claims for jobless benefits rose to their highest level in more than 26 years last week.

Data released in Spain showed the number of people claiming jobless benefits climbed steeply in March and at a much higher rate than larger European economies. Euro zone unemployment jumped more than expected in February to 8.5%.

As the ranks of the unemployed grow, so too do their debt loads.

A report by the American Bankers Association, which represents most large US banks and credit card companies, said the percentage of consumer loans at least 30 days late rose to a seasonally adjusted 3.22% in the October-to-December period from 2.9% in the prior quarter.

Two key industries offered glimmers of hope.

Shares of major carmakers rallied after sales in the United States and Europe in March were better than expected, encouraging hopes that the global auto market collapse could be nearing an end. Car sales in Germany jumped 40% in March.

In Britain, where the property market is a key component of consumer confidence, data from home loan company Nationwide reported that house prices rose in March for the first time since October 2007, although the lender cautioned against jumping to conclusions about a housing market rebound.

In Washington, the former chief executive of American International Group - and creator of the unit that led to its downfall - came under fire from US lawmakers who questioned his claim that he knew of no losses from the products initiated during his tenure.

Maurice Greenberg, forced out by AIG’s board in 2005 after refusing to cooperate with an internal investigation, denied responsibility for the firm’s near-collapse. “When I left the company, it was healthy,” he said.

The European Central Bank cut its main financing rate by half the expected 50 basis points to 1.25%. But investors shrugged off their disappointment, with some betting more cuts are on the way.