G20 leaders to meet in US on financial crisis

[manimarank]

Washington, Oct 23: Leaders of the world's richest nations and biggest emerging economies will gather in Washington on November 15 for an unprecedented summit on tackling the global financial crisis, the White House said.

US President George W Bush will host the summit 11 days after the US presidential election, but it is unclear whether the man Americans pick to succeed Bush -- Democrat Barack Obama or Republican John McCain -- will attend as well.

"The President today is going to invite the leaders of a group of 20 countries ... to a summit in Washington, DC to discuss the financial markets and the global economy," White House spokeswoman Dana Perino told reporters.

"The leaders will review progress being made to address the current financial crisis, advance a common understanding of its causes and, in order to avoid a repetition, agree on a common set of principles for reform of the regulatory and institutional regimes for the world's financial sectors."

Such summits are usually planned a year in advance, but Perino said the financial crisis -- marked by plunging stock prices, collapsing banks and frozen credit -- calls for quick action.

"The time will be just about right to have it then, because a lot of the emergency measures that these countries have put forward are, hopefully, starting to have an impact," she said.

Created in 1999, the Group of 20 accounts for 90 per cent of the world economy and about two-thirds of the world's population.

It comprises the seven major industrialized nations -- Britain, Canada, France, Italy, Japan, Germany and the United States -- and Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

It also takes in the 27-nation European Union, represented by France, which holds the rotating EU presidency. The International Monetary Fund and World Bank also participate in its meetings.

Principles hammered out at the summit "can be further developed by working groups for consideration in subsequent summits," Perino said, with another summit possible before the next US president is inaugurated on January 20.

"I believe that they will task financial experts in those countries to put meat on the bones when it comes to fleshing out the principles that we would be talking about," she said.

UN chief Ban Ki-moon will join the summit, his press office said.

But the news of the global summit failed to halt a sell-off as panic-selling returned to global stock markets.

The leading Dow Jones industrial index shed 5.6 percent, as fears of global recession stalked investors.

While in falls reminiscent of the worst of the turbulence of the last few weeks, prompted by gloomy outlooks and weak company results, European markets lost 4.0-5.0 percent while the Dow closed down 509.83 points at 8,523.83.

The global financial meltdown has led to calls for reform and joint action by G20 governments, with Europeans suggesting it is time to replace the Bretton Woods agreement that has guided international finance since World War II.

Asked if Bush retains sufficient authority to hold a summit in the final weeks of his tenure, Perino said: "I think all the leaders have agreed that we wanted to have this summit. They wanted the president to be able to host it."

She sidestepped a question as to whether the winner of the November 4 election -- Obama or McCain -- would attend, saying: "You don't want to box the next president in."

Obama, the favorite to be the next President, according to opinion polls, said questions about his participation were premature.

"I don't want to make commitments at this point in terms of our participation, my participation in something, before I've even won the election," he said.

French President Nicolas Sarkozy welcomed news of the summit, which he promoted at the UN General Assembly a month ago and discussed in detail with Bush at Camp David last weekend, his office in Paris said.

"This first summit will be followed by several others, in order to refound the international financial system and, through better regulation and more efficient oversight, ensure the crisis is not repeated," the Elysee Palace said.

Russia thinks it is "very important" the summit take place on US soil, as "the origins of the financial crisis are in the US financial system," presidential spokeswoman Natalia Timakova said.