Leaders from the world's 20 largest economies are gathered in Washington D.C. for a summit meeting aimed at addressing the deepening global financial crisis, reported CNN.
Formal talks were due to get under way Saturday after U.S. President George W. Bush hosted a dinner for the visiting dignitaries at the White House on Friday.
"There is more work to do beyond the immediate crisis and the stakes are indeed high," Bush said in a welcoming address. "Billions of hard-working people are counting on us to strengthen our financial systems for the longterm."
The G-20 meeting could test the United States' traditional economic dominance with European leaders expected to call for tighter regulations to be imposed on banking systems and credit markets.
The summit has been compared to the Bretton Woods meeting in 1944 which laid the foundations for the post-World War II economic order by creating the U.S.-dominated World Bank and International Monetary Fund.
Speaking earlier this week, Bush said he would defend the free market principles of Western-style capitalism and warned against excessive regulation.
"We must recognize that government intervention is not a cure-all," Bush said in statement Thursday. "History has shown that the greater threat to economic prosperity is not too little government involvement in the market -- but too much."
Bush and U.S. Treasury Secretary Henry Paulson have been criticized by fiscal conservatives in the U.S. over a $700 billion federal rescue package offered initially to banks but widened earlier this week to other financial companies including credit card and auto loan companies.
Bush has baulked from further bailout measures, including a Democrat-proposed rescue package for the ailing U.S. auto industry.
But European leaders are expected to bring their own proposals to the negotiating table. They include greater oversight of hedge funds and investment banks; increasing how much money banks need to keep in reserve; more transparent and universal accounting standards; limits on executive pay; and a new global network of regulators.
International banking expert Irene Finel-Honigman of Columbia University told CNNMoney.com that European leaders had been emboldened by their belief that the financial crisis stemmed from lax regulation -- or "cowboy capitalism" -- of the U.S. banking system.
"The Europeans see themselves as taking a position equal to the U.S.," said Finel-Honigman. "We're looking at a different composition of players and a different powerplay. It's going to be fascinating to watch."
The summit comes with no sign of the economic crisis abating and amid swathes of job losses on both sides of the Atlantic and ongoing pain for investors in global stock markets
On Friday the European Union announced that the 15-nation eurozone had fallen into recession for the first time since the introduction of the common currency. Germany, Europe's single largest economy, also confirmed earlier in the week that it was in recession.
British Prime Minister Gordon Brown warned that leaders needed to agree measures to safeguard against future financial problems. "Instead of just muddling through dealing with the crisis, we have to show how we are making the adjustments in the proper way to this global age," Brown said, according to The Associated Press.
With major developing world economies such as China, Russia, India and Brazil also present, the G-20 represents 90 percent of the world's economy and 75 percent of the global population.