G20 Eyes Financial Crisis Way-out

"There's some progress being made but there's still a lot more work to be done," said Bush. (Reuters)

"I am pleased that we're discussing a way forward to make sure that such a crisis is unlikely to occur again," US President George W. Bush said ahead of the opening of the G-20 summit, reported Agence France-Presse (AFP).

"And I am pleased that the leaders reaffirmed the principles behind open markets and free trade."

Leaders of the world's biggest 20 economies are discussing how to head off the world's worst financial crisis since the Great Depression of the 1930s.

"The financial summit will adopt an action plan to demonstrate that the community of nations has the capacity to act," said German Chancellor Angela Merkel.

"There exists here a major common willingness to reassure that such a crisis will not be repeated and to revive the world economy as quickly as possible."

The G20 leaders, whose countries represent 85 percent of the world economy, are expected to commit themselves to stimulus efforts, reform of financial regulation and global governance changes.

Few specifics on the reforms are yet available, but a high-ranking French official said an action plan with deadlines would be agreed in another economic summit in March.

A financial firestorm swept the US in September after the collapse and financial woes of a number of Wall Street giants.

The crisis has since knocked down markets worldwide.

Locked

The summit is discussing changes to the world financial system, including more regulations on the financial industry.

"This crisis has not ended. There's some progress being made but there's still a lot more work to be done," said Bush.

"One of the dangers during a crisis such as this is that people will start implementing protectionist policies."

The G20, which includes the major industrialized nations as well as emerging giants Brazil, China, India and Russia, has been locked in debate about what caused the crisis let alone how to escape from it.

While Bush wants a limited tinkering with global financial rules, and no new trade barriers, French President Nicolas Sarkozy has declared that "laissez-faire capitalism is over" as banks crippled by toxic mortgage assets are forced to turn to government aid.

The leaders are also discussing ways to open up global institutions such as the International Monetary Fund to emerging economies.

The global economic climate already worsened as the world leaders met in Washington.

Friday brought news that the 15 eurozone nations were now gripped by recession after two quarters of economic contraction, and US retail sales tumbled a record 2.8 percent in October as worried consumers hunkered down.

The International Monetary Fund and the Financial Stability Forum said Friday they would cooperate to provide an "early-warning system" in an effort to prevent new financial crises.