(Repeats to add first name of French finance minister)
By Louise Egan and Renato Andrade
SAO PAULO, Nov 8 (Reuters) - Brazil's president called on
Saturday for an overhaul of the global finance system which
"collapsed like a house of cards" in the credit crisis and said
emerging powers must have more say in key decisions.
Luiz Inacio Lula Lula, addressing finance officials and
central bank chiefs from around the world, slammed the
"dogmatic faith in non-intervention in markets" that has been
espoused by the United States and other countries.
"We need new, more inclusive governance and Brazil is ready
to face up to its responsibilities," the burly former union
leader said. "It is time for a pact between governments to
build a new financial architecture for the world."
Finance ministers and central bank governors met in
Brazil's economic hub of Sao Paulo to grapple with ways to
tackle the global financial crisis on Saturday.
Canadian Finance Minister Jim Flaherty expected central
bankers to continue discussions about joint action to lower
interest rates further and counter the blow to growth from the
credit crisis.
"I expect that these discussions will lead to some degree
of coordinated action," Flaherty told reporters as the
discussions got under way on Saturday.
On Friday, the "BRIC" nations of Brazil, Russia, India and
China for the first time forged a joint position that called
for reform of institutions like the International Monetary Fund
to reflect the growing importance of developing economies.
The G2O group, which includes emerging and advanced
economies, should take over from the rich-country G7 grouping
as the main forum for discussing global finance, Brazil said.
The South American economic powerhouse holds the presidency
of the G20 this year.
NOT JUST INVITED FOR COFFEE
"We refuse to take part in the G7 merely to drink coffee
and we have to have a more important role in discussions,"
Brazilian Finance Minister Guido Mantega said on Friday.
Lula has long criticized the dominance of the United States
and other developed economies in the way decisions on global
finance are taken.
Among officials attending the meetings in Sao Paulo were
central bank chiefs such as Ben Bernanke of the U.S. Federal
Reserve and Jean-Claude Trichet of the European Central Bank.
Canada's Flaherty played down the need for a major shake-up
of the way global finance is managed.
"Now is the time to be putting out the fire, not to be
planning for grand new schemes," he said. "We're in the midst
of a crisis and certain things need to be done now."
Any progress at the G20 gathering and a meeting of the Bank
of International Settlements also in Sao Paulo could be taken
to a G20 heads of state summit in Washington on Nov. 14-15.
But the chance of major reform proposals appear slim, not
least because the outgoing administration of U.S. President
George W. Bush has played down the need for big reforms.
U.S. Treasury Secretary Henry Paulson and many European
finance ministers did not attend the meetings in Sao Paulo.
The finance minister of France, which holds the European
Union's presidency, told Reuters as she arrived in Brazil that
this weekend's meetings would be pave the way for the
Washington summit.
"I don't think it will be conclusive because it can only be
conclusive at the level of heads of state and government. But
if we can compare notes and share views sufficiently so that
positive conclusions can be reached at the Nov. 15 meeting,
then we will have done a good job," Christine Lagarde said.
(Additional reporting by Anna Willard; Writing by William
Schomberg; Editing by Todd Benson)
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