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, reuters reported.
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 shakeup 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.