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G-8 Nations Plan Summit On Global Financial Rules

By Edward Cody
Washington Post Foreign Service
Thursday, October 16, 2008

BRUSSELS, Oct. 15 -- The Group of Eight major industrialized nations announced Wednesday that they will convene a summit to plan changes in the regulation and structure of the world financial industry in hopes of heading off future economic turmoil.

The statement, released at the White House, said the meeting would take place in the "near future." French President Nicolas Sarkozy said it should be "preferably in New York, where everything started."

Sarkozy has been urging President Bush to call a summit to rewrite the rules of international finance ever since the crisis erupted on Wall Street in mid-September. According to French officials, the Bush administration at first was cool to the idea but came around as the extent of the crisis became clear.

Sarkozy's argument was that the world's financial exchanges have evolved dramatically since the conference in 1944 at Bretton Woods, N.H., that gave rise to the modern financial system. In particular, he has called for increased government supervision of international banking and financial exchanges.

"We need to found a new capitalism based on values that put finance at the service of companies and citizens and not the reverse," Sarkozy told fellow leaders of the 27 European Union countries, who were gathering in Brussels on Wednesday for a summit of their own.

The British prime minister, Gordon Brown, said he foresaw "very large and very radical changes" coming from the G-8 gathering, which he said should also include emerging economies such as India and China.

Similarly, German Chancellor Angela Merkel stepped into line, telling the German Parliament that world leaders should gather with those of emerging economies to plan for a new International Monetary Fund role and a new way to oversee international financial exchanges.

The G-8 consists of the United States, Canada, France, Britain, Germany, Italy, Russia and Japan.

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