World leaders, facing financial markets in turmoil and the possibility of global recession, will discuss ways to fix the crisis at a summit meeting in Washington next month. US and European leaders, sparring over the causes of the credit crunch and how to cure it, don't expect to reach consensus on what steps to take. Instead, the Nov. 15 summit may produce only an agreement to hold additional meetings. “Everybody will come with their own ideas,'' White House spokeswoman Dana Perino said. “Not everybody will have the same solution.'' President George W. Bush, responding to calls from French President Nicolas Sarkozy and UK Prime Minister Gordon Brown, invited leaders from the so-called Group of 20 industrialized and developing nations to attend the summit. Brown wants greater cross-border oversight of banks and other financial firms. “We must now take action on the global financial recession,'' he said in Parliament today, “because no country can insulate itself from it.'' Sarkozy has called for much stricter government supervision of financial markets and their participants. He said today his goal is to “reform the international financial system and ensure that the current crisis won't repeat itself thanks to a better regulation.'' Perino, however, suggested the Bush administration is more interested in a discussion of “principles'' for prudent country- by-country regulation. And the Financial Services Roundtable, which represents 100 of the largest US banking, insurance and investment companies, said while it supports the idea of international regulatory guidelines for capital standards and consumer protection, the application of those principles should be left to each individual country. “We live in a global economy,'' said Roundtable President Steve Bartlett. Jeffrey Sachs, director of Columbia University's Earth Institute in New York and a longtime adviser on economic and fiscal issues to governments worldwide, said the leaders' first goal should be to mitigate the effects of a global recession. The G-20 should encourage looser fiscal policy in Asian countries such China, South Korea and Japan to stimulate international trade and demand. And the leaders should use their central banks to provide a safety net for banks in emerging- market nations that “might face a threat to liquidity through no fault of their own,'' he said. Low interest rates through much of this decade led banks and investment houses around the world to make loans that have since soured. Many of those loans were packaged into other securities, which have also gone bad, forcing financial institutions to write down billions of dollars in assets. The differences suggest little may be accomplished, said Allan Meltzer, a professor at Carnegie Mellon University in Pittsburgh. He chaired a congressional commission that studied the international financial system in 2000 after the Asian financial crisis. “International agreements like Bretton Woods require a fairly large amount of international cooperation and agreement on goals,'' Meltzer, 80, said. “That isn't present.'' Julian Jessop, chief international economist at Capital Economics Ltd. and a former UK Treasury official, also said he was skeptical about what the summits could accomplish. “What's worked well in the last few weeks is individual countries have come up with their own solutions for the credit crunch and best practices have emerged that others can copy,'' Jessop said. “It's a global problem, but maybe it's best for countries to come up with their own end.'' Sachs, 54 said “we need financial institutions that make sense for the challenges we're facing ... not just an effort to fight the last war, which is what financial regulation would do.'' The Group of 20, created as a response to the financial crises of the late 1990s, includes finance ministers and central bank governors from the G-8 industrialized nations as well as developing nations. G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the US, the UK and the European Union. US President George W. Bush will host the summit 11 days after the US presidential election. “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
