US President George W Bush has admitted the financial system needs reforming, but insists the credit crunch was not a failure of the free-market system, BBC reported.
Speaking in New York, Mr Bush said that while financial markets did need some new regulation and more transparency, free trade should not be restricted.
His comments come before world leaders meet in Washington at the weekend to discuss the global economic downturn.
Mr Bush said bold government measures had already helped improve matters.
Yet he said state action was not a "cure-all", and what was now needed was a reform of the global economy "without trying to re-invent the system".
He has called for improved accountancy rules, better co-ordination of national laws and regulations, and making the World Bank and the International Monetary Fund more representative.
Ahead of the summit, French President Nicolas Sarkozy said the US dollar was no longer "the only global currency".
Speaking at a ceremony in Paris, Mr Sarkozy said times had changed since the Bretton Woods conference after World War II laid the foundations of modern financial institutions.
"What was true in 1945 can no longer be true today," he said.
French Finance Minister Christine Lagarde said the strength of the euro was making it more attractive than before.
But she cautioned creating further instability through a major shift in central banks' currency reserves.
The summit in Washington brings together leaders of the world's biggest democracies, emerging nations and international organisations.