G-20 summit: Plan to reform global financial system being readied

Washington: British prime minister Gordon Brown and German chancellor Angela Merkel have let it be known that world leaders are making progress at an emergency economic summit in Washington. Speaking to reporters before a G-20 summit on the global financial crisis, Brown said the talks were difficult but he hoped to persuade countries to agree on concrete actions by the end of the summit.

Without offering details on the progress at the meet, Brown also said nations were likely to agree on reforms to global financial institutions within months. Reform plans would be followed up at another meeting next year.

Taking opportunity of the summit, Brown said it was likely that a deadline may also be set revival of stalled world trade deal talks.

Meanwhile, German chancellor Angela Merkel told reporters that leaders at the summit would achieve consensus on a plan "that includes almost 50 actions that have to be implemented by the end of March."

"The point is that all actors on the market, all products and all markets shall be really regulated and surveyed," she said.

Officials elaborated that the plan would aim at making the global financial system more accountable to investors and more transparent to regulators.

When implemented the plan would improve international monitoring of markets.

Such a plan is as yet in the realm of speculation for leaders are yet to arrive at any agreement and confirmation would only come from a formal communiqué at the end.

Meanwhile, reports emerging from the summit say that developing nations may use the summit to widen their clout as Western economies slide into recession.

"We must use the crisis as an opportunity to correct things that were wrong before the crisis and strengthen multilateral bodies, because in a globalized world we need serious and representative forums to take global decisions," Brazilian president Luiz Inácio Lula da Silva told reporters this week.

In his comments Lula also dismissed the relevance of the G-8 body -- the gathering of seven developed countries plus Russia, in the current crisis. Normally, it would have been the G-8 that would have dealt with the crisis on its own in earlier years.

Interestingly, Japanese prime minister Taro Aso, also called on China and other developing economies to contribute some of their vast foreign exchange reserves to the International Monetary Fund. China, as the holder of the world's largest cash reserves, is particularly important in this regard.

Japan has already committed $100 billion to the IMF.