As the largest gathering of presidents and prime ministers here since NATO's 50th anniversary celebration in 1999, the leaders of the G-20 countries met for an emergency summit on the global financial crisis. The meeting of G20 representing about 90% of the world economy, hosted by the outgoing US president, is bringing together both leading industrial powers such as the US, Japan and Germany, and emerging market countries such as China, Brazil and India as well as oil leader Saudi Arabia.

World leaders continue talks on measures to limit the current financial turmoil at a summit in Washington. They hope to agree on long-term reforms to cut the risk of further crises and a coordinated economic stimulus plan. Efforts are focused on five hours of formal talks on Nov 15. The summit began with a working dinner on14 Nov. Divisions have emerged between Europe, which wants stricter market rules and the US and other countries, which prefer more moderate reforms. Later summits are expected to focus on working out the details of the reforms needed.

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Opening the two-day summit at the White House, US President George W Bush dampened hopes for quick solutions. He said this problem did not develop overnight and it will not be solved overnight, but with continued cooperation and determination it will be solved. But US President-elect Barack Obama is not attending, raising concerns over the lack of guarantee that any proposals agreed by Bush will be implemented by his successor.

The participants hope to agree on a common set of principles for future reform, including changes to the organizations charged with regulating the world economy. Anger toward America for causing the financial disaster is prevalent. Antonio Patriota, Brazil's ambassador to the United States, told reporters that the financial crisis has made all participants in the system equal. There were complaints about the speculation and deregulation in the US that became this market tsunami. The G-20 summit is being held in Bush's "lame duck" period. The policies of his administration over the past several years are seen as at least partly responsible for the current global financial crisis. At a time when Bush is considered to have lost his credibility on economic matters, it also is not clear if his pledges will be taken seriously at the G-20 summit.

Leaders are close to agreeing a concrete action plan on financial regulation. Speaking after the opening dinner, German Finance Minister Peer Steinbrueck said "the window of opportunities for financial reform has never been as wide open as at present". Canadian Prime Minister Stephen Harper said that he thought it was unlikely that the major economies of the world would consent to external control of their regulatory systems. "Compulsory governance... is unrealistic," he said. However, European leaders have signaled that they are seeking more far-reaching initiatives. "We want to change the rules of the game in the financial world," said French President Nicolas Sarkozy.  German Chancellor Angela Merkel said she was surprised to hear warnings against too much regulation of financial markets when the crisis had not yet been overcome.

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Earlier, President Bush had insisted the financial crisis was not a failure of free-market capitalism. "The answer is to fix the problems we face, make the reforms we need, and move forward with the free-market principles that have delivered prosperity and hope to people all across the globe," he said. Speaking in New York, he said the surest way back to sustained economic growth was not to reinvent the system, but to reform it. 

Contributions from China, Saudi Arabia and gulf oil-exporting countries are being sought to bolster IMF's $250 billion reserves. Already the balance of economic power is showing signs of shifting. The point is that if China and the Gulf countries are called upon to refurbish IMF funds, will they not ask for a change in their shareholding positions at the IMF. Indeed, there is a mismatch in the current financial system. While financial markets have gone global, regulatory agencies are national. This needs fixing, but that requires sovereign commitments across borders.

An emerging challenge that the summit will have to address is the matter of growing imbalance in saving and spending in different parts of the globe. This imbalance has been a thorn in the global order. The challenge is to get the Chinese, for instance, to adjust their exchange rate, spend more and reduce their current account surpluses. At the same time, Americans and Europeans have to spend less and save more. Fundamental reforms are called for in the following areas: risk management practices, compensation structures, oversight of securitized mortgages, credit rating agencies, and infrastructure of derivatives markets.

UK Prime Minister Gordon Brown has taken the lead in urging China and other countries with big cash stockpiles to finance the International Monetary Fund so that it can make more emergency loans. Japan has announced it is prepared to lend up to $100bn to the IMF to help emerging economies hit by the financial crisis. Meeting on the sidelines of the summit, the Japanese, Chinese and South Korean finance ministers said they might expand their mutual currency swap arrangements.

The absence of the most talked about man in the US "” whose remarkable victory caught global attention "” disappointed some of the world leaders who were hoping to meet the president-elect to get to know him better ahead of his inauguration next year. Instead, Barack Obama designated former Republican Congressman Jim Leach and former Secretary of State Madeleine Albright to meet unofficially with delegations at the summit on his behalf. "While some may say it's awkward that he's not there, it would be far more problematic to be there. We firmly believe there is only one president at a time," said Robert Gibbs, a senior adviser to Obama. Many say his decision to stay away is to avoid any conflict of views with President George W. Bush that could come up with world leaders.

China is likely to be the key to any reforms agreed. With nearly $2 trillion in foreign exchange reserves and an economy that is still expanding, albeit at a slower pace, it is one of the few countries attending that has the cash to help countries in distress. "We will actively participate in rescue activities for this international financial crisis," said Yi Gang, deputy governor of the Chinese central bank. With nearly $2 trillion in foreign exchange reserves and an economy that is still expanding, albeit at a slower pace, it is one of the few countries attending that has the cash to help countries in distress. However, in exchange China is likely to want to hold more power at the IMF, which is dominated by the US and the EU.

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This gathering of 20 nations also is a reminder that the smaller club of rich nations known as the Group of Eight has failed to stop the financial disaster. Together, the G-20 economies make up 90 percent of global gross national product, 80 percent of world trade and two-thirds of the world's population. The meeting is intended to send reassuring signals to global financial markets that a coordinated global rescue and recovery are on the way. The danger is that the hastily organized summit, hosted by a lame-duck US president, will also convey a subliminal message of discord over the future of the global economy. The Bush administration initially wasn't enthusiastic about this weekend's meeting of the Group of 20 nations to discuss the global financial crisis. Having fouled the global economic nest, America must now work with other nations to clean it up.

The European leaders, in particular, would rather wait for the follow-up meeting which the French President is already signaling to convene shortly after Obama's inauguration. Obviously, the economic world is looking forward to hearing from the president-elect Obama Barack. The summit would come out with a proposal for a suitable economic stimulus plan to contain recurrent economic crises.  The ball is obviously in the court of USA.