Global leaders' summit in Washington on 15 November

The worsening financial crisis and the possibility of further cascading effects on the global economy has prompted leaders of the G20 countries to agree to a summit in Washington on 15 November to plan how to avert a deep and prolonged economic crisis, as predicted by some economists.

White House spokeswoman Dana Perino said that the president today is going to invite the leaders of a group of 20 countries to a summit in Washington DC, on November 15 to discuss the financial markets and the global economy.

This is the first in a series of summits to stem the possible long and deep recession that may hit the world which economists predict. This meeting will focus on the underlying causes of the financial crisis, the global response and the principles that should guide any future reforms.

Last week, President Bush met with finance ministers from the G-7 and the G-20 groups, which include some of the world's largest and fastest-growing economies.

Leaders from G20 countries, that include the G7 industrialised countries 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, Turkey and the European Union will attend the summit. The G20, formed in 1999, collectively accounts for 85 per cent of the world economy.

 On Wednesday, leaders of the G-8, that includes Russia and the G7, issued a statement calling for a leaders' meeting with a broader group of countries - developed and developing - to work together to improve the regulatory and institutional structures of global  financial systems.

Perino said that generally such conferences are planned a year in advance but the current crisis required a rapid response.

Perino said countries would come with different approaches regarding what is needed to fix the system. Leaders will review progress being made to tackle the current financial crisis, arrive at 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.

However, Peerino clarified that details of plans were not expected to emerge out of this meeting "in terms of things that everyone agrees to at the first meeting,'' and therfeore, the summit would not come out with decisions on new policy or regulation, as the job of detailed programmes would be left to financial experts in individual countries after the world leaders reviewed the causes of the crisis, the response to it till date, and the principles of reform that would be followed.

The leaders will form working groups to prepare policy recommendations which would be put up at a future summit, said a senior administration official, who spoke on condition of anonymity. 

Perino  said that "A lot of work will have to be done at the task force level, the working group level." 

The summit will be held 11 days after the US presidential election on 4 November. Perino said that the presidential candidates John McCain and Barack Obama were informed of Bush's intentions and both supported the idea.

She further added that thye winner of the US presidential election, who takes office on 20 Januar will also attend the summit. 

Republican nominee Barack Obama declined to say whether he would attend the meeting of world leaders, saying, "We have one president at a time," When asked at a news conference in Richmond.

Senate Majority Leader Harry Reid, said the summit was "a positive, constructive step."

Reid hoped that the meeting will not only address the immediate crisis facing the global economy but would make the international financial system stronger and more secure. 

Ban Ki-moon, UN secretary-general will also attend the summit.

''There was no way to control the timing of the financial crisis, but that world leaders agreed that a summit was needed, and that Bush was excited to host it. ''We will seek the input of the president-elect,'' she said.

At the Camp David, presidential retreat last week, Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso decided on a series of summits to gather the international community to work in tandem to tackle the credit crisis that has affected world markets.

At the Camp David meet, Bush cautioned that any international effort should safeguard the democratic capitalism - free markets, free enterprise and free trade.

President Sarkozy had a different view, he said capitalism has to be re-invented to include a strong regulatory system.

Sarkozy in a speech last month said that ''The all powerful market that always knows best is dead.''

The financial crisis started with the collapse of the housing market in the United States which led to the tanking of the broader financial system, bringing about a credit freeze in USA and cascading the globe over. Until now, a series of remedial actions by the Federal Reserve and the Bush administration has yet to turn around the U.S. economy. Businesses are hesitant to boost capital investments, employment is slowing down, consumer spending has dropped, and all the economy's problems are multiplying.

Bush has supported the various steps taken by the European nations to fix the financial markets and is willing to pay attention to ideas from both developed and developing nations.

Bush's clout is said to be diminishing with the election coming up next month and this summit is being described an all-out effort to save his prestige as an outgoing president. He has avoided signing more broad reforms that some European leaders wanted, to avoid a repeat of the financial crisis that tumbled over to the world markets.