Group of 20 gathers to right world economy

<p>WASHINGTON -- Leaders from nearly two dozen countries, large and small, convened Friday to take part in a financial summit with an agenda as broad and complex as the crisis it is meant to stem.</p><p>With the global economy slipping into its most serious downturn in decades, the Group of 20 seemed likely to agree on a few modest measures, according to a senior American official, including a commitment to have banking regulators coordinate their efforts more closely.</p><p>The bulk of the communique, which some diplomats have begun referring to as the Washington declaration, will be devoted to setting up working groups to develop new financial regulations, this official said. These measures -- some of which sharply divide the U.S. and Europe -- would be taken up at subsequent meetings.</p><p>"It's safe to say that the best thing to come out of this will be an agreement to have future meetings," said Kenneth Rogoff, a professor of economics at Harvard. "The elephant in the room is regulation, and they're surely not going to solve that in one meeting."</p><p>In keeping with the gravity of the economic situation, there was little of the pageantry usually associated with such gatherings.</p><p>Police set up concrete barriers blocks from the White House and at hotels where the leaders were staying and holding meetings. By early evening, the rain-slicked streets were gridlocked as motorcades of presidents and prime ministers, as well as a German chancellor and a Saudi king, made their way to the White House for dinner with President George W. Bush.</p><p>As the leaders prepared for the summit at the National Building Museum this morning, many freed up time to meet two emissaries for President-elect Barack Obama: former Secretary of State Madeleine Albright and former Rep. Jim Leach, R-Iowa.</p><p>Obama is not taking part in the summit, but he made Albright and Leach available to meet with delegations -- an offer eagerly accepted by many of the participants.</p><p>Obama's representatives shuttled between hotels and downtown office buildings to meet with U.N. Secretary-General Ban Ki-moon; the presidents of South Korea, Mexico and Argentina; and senior officials from Canada and Germany. More meetings were set for this afternoon, once the summit meeting is adjourned.</p><p>"People are vying for Obama's attention," said Simon Johnson, a former chief economist of the International Monetary Fund.</p><p>Though Obama has not detailed his views on international financial regulations, he has backed a stimulus program to revive the U.S. economy, which is a theme at this meeting.</p><p>China and Germany have recently announced stimulus packages, and Prime Minister Gordon Brown of Britain signaled his government would announce a package of measures next week.</p><p>Still, the participants were unlikely to agree on a statement of support for a coordinated worldwide stimulus, because Bush opposes a further package in the United States, having approved a $168 billion measure earlier this year. Administration officials said they believed such a statement was not necessary.</p><p>"If every country does what's good for its economy, you'll get what you need," said the official, who spoke on condition of anonymity because the communique had not yet been approved.</p><p>Bush finds himself in an unusually constrained position at this summit meeting, with just over two months left in office and as leader of the country from which the financial crisis erupted.</p><p>Nevertheless, he offered a ringing defense of free markets in a speech in New York on Thursday, warning against efforts to adopt a latticework of regulations.</p><p>The White House is likely to sign on to a European proposal for a so-called college of supervisors. Under the plan, regulators from several countries would meet periodically to share information on the largest global financial institutions.</p><p>The Bush administration said it was important for the leaders to reach broad agreements on principles and have committees of experts come back with concrete proposals for the next meeting. These will cover issues like accounting, transparency and risk management.</p><p>The summit meeting is also likely to address executive pay and accounting rules. But an official cautioned that the issues would not be addressed in detail in the communique. "You can't expect the leaders to say what accounting standards should be," he said.</p><p>"What they can do is set the guiding principles."</p><p>On the eve of the meeting, Japan pledged $2 billion to a World Bank program to recapitalize banks in smaller developing countries.</p><p>While welcoming the commitment, the president of the World Bank, Robert B. Zoellick, said he worried that the format of the meeting -- with its emphasis on wealthy countries and major emerging economies like Brazil and China -- might give short shrift to the poorest nations.</p><p>One of the meeting's European participants, Prime Minister Jan Peter Balkenende of the Netherlands, returned home Friday evening after learning that his father had died.</p><p>In his remarks at the start of the dinner, Bush said he had received a phone call with the news from Balkenende. Bush said he offered his "heartfelt sympathies and prayers" to the Dutch leader.</p>