Gordon Brown, the British prime minister, said the European Union wanted the rating agencies and big audit firms to improve financial transparency, arguing it was vital to "rebuild confidence" in the markets.
Angela Merkel, German chancellor, said a lack of trust was undermining faith in the capitalist system and could fuel protectionism. "That is a very wrong move," she said.
The leaders of Europe's biggest economies said they wanted the financial system to get its own house in order, but warned that regulators stood ready to act if greater transparency was not forthcoming.
Mr Brown and Ms Merkel were joined at the summit by Nicolas Sarkozy, the French president; Romano Prodi, the Italian prime minister; and José Manuel Barroso, the European Commission president, to hammer out a European response to the global financial crisis.
Amid a raft of proposals, the attack on ratings agencies - accused by some of failing to sound the alarm about financial instability - was the most striking.
Mr Sarkozy said: "The warnings we are issuing to credit rating agencies have to be heeded. We want the sort of capitalism which encourages entrepreneurship, not speculation." Reflecting his country's traditional concerns about the excesses of "Anglo-Saxon" capitalism - heightened by the Société Générale scandal - Mr Sarkozy insisted: "We don't want protectionism, we want transparency."
A communiqué issued after the 90-minute meeting called for "improvements in the information content of credit ratings to increase investors' understanding of the risks associated with structured products". It also called for the sector to address conflicts of interest between the agencies and the institutions they assess. While preferring market-led solutions, the leaders said they stood "ready to consider regulatory alternatives".
The meeting paved the way for more detailed work at next week's Tokyo meeting of the Group of Seven leading industrial nations, to deliver a global response to the recent instability.
The Europeans want audit firms to deliver "clear and consistent guidance on valuation and disclosure" of risks from off-balance-sheet vehicles, and prompt and full disclosure of losses by banks. They also agreed to press for better early warning mechanisms on future economic crises, including a longer- term move to "strengthen and clarify the International Monetary Fund's responsibility to oversee macro financial stability".
The Downing Street meeting gave the four national leaders a chance to put their domestic economic problems in an international context, and to claim to be doing something about it.
Mr Brown used the summit as a chance to improve his standing on the European stage after the perceived snub of his late attendance at last month's EU treaty signing in Lisbon. Although the leaders agreed on a lengthy list of reforms, they insisted: "The fundamentals of the European economies remain strong with employment still rising."