Key emerging economies call for overhaul of financial system

SAO PAULO (AFP) - The world's top emerging economies -- Brazil, Russia, India and China -- want "a reorganization of the world financial system," Brazilian Economy Minister Guido Mantega told reporters Friday ahead of a G20 meeting.

The G7 group of the most advanced economies is no longer sufficient to address global crises such as the one rippling around the world, and the G20 should be strengthened to supersede it, Mantega said after a meeting with his counterparts from the other so-called BRIC countries.

The joint position was worked out on the eve of a G20 meeting of finance ministers and central bankers in Sao Paulo that is seen as a precursor to an emergency G20 summit of heads of state and government in Washington on November 15.

Mantega, summarizing his discussions with finance ministers from Russia, India and China, said "we have come to the conclusion that there must be a reformulation, a reorganization of the world financial system."

Specifically, he said, the system put in place by the 1944 Bretton Woods agreement was outdated and needed to be changed to take into account the greater economic importance of emerging nations.

The G7 -- Britain, Canada, France, Germany, Italy, Japan, the United States -- "is not sufficient," he said.

The emerging nations want to see the G20 -- which includes the G7 and the BRIC countries, plus other significant economies such as Australia, Indonesia and Turkey -- reinforced and elevated to a heads-of-state and heads-of-government level, above the finance ministerial status it currently has.

The BRIC ministers also put the blame for the current crisis with the world's most advanced economies, noting that it began in the United States and quickly spread to Europe.

As a result, they want to see international financial institutions such as the World Bank overhauled, because "they didn't detect the crisis in time."

In the meantime, advanced economies "have to do more" to stem the fall-out from the crisis, notably by improving access to credit and restoring confidence in financial markets, Mantega said.