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14 Nov, 2008 17:57

World waits for answers from G20 on financial chaos

With the Euro-zone and US in recession, the world’s leaders are meeting in Washington to discuss what to do next. Members of the Group of 20 will put their rescue plan on the table – but few expect firm agreements or complete solutions.

The G-20 leaders came to Washington on Friday to talk about what can be done to get the global economy on track.  But there aren't likely to be any quick fixes.

Europe is expected to push for more coordinated regulation of business. That will probably include tougher control on rating agencies and hedge funds. Russia shares the EU position, and is urging world leaders to take action fast, with President Medvedev making it clear he wants more than just PR.

“We need a full-scale, adequate solution to the present problems. Not just a series of declarations, not just handshakes and photographs, but an action plan. We really should insist on a full-blown agenda and complete solutions, especially as in general the views among almost all states on this question coincide.”

Russia also wants to review the role and structure of national regulators, increase transparency in public companies and strengthen control over them.  And it wants to make rating agencies and audit companies more responsible for their actions.

Elina Ribakova, Chief Economist at Citibank expects the increasingly influential emerging market nations like Russia, Brazil and China to demand a stronger voice at the IMF.

“The main thing for Medvedev and representatives of other BRIC countries at the summit is to have a greater role for BRICs in the determination of the international financial policy. On of the ways they can do it is by expanding voting rights at the international financial institutions like the IMF.”

Experts point out that in order to have a greater economic and political weight, the BRIC countries should provide money to support economically weaker countries.  But Russia has to put its own financial house in order first before it lends a hand to others.