Brazil's Lula calls for shake-up of global finance

Sat Nov 8, 2008 7:26pm EST
By Louise Egan and Renato Andrade
SAO PAULO (Reuters) - Brazil's president called on Saturday for an overhaul of the global finance system that "collapsed like a house of cards" in the credit crisis and said emerging powers must have more say in key decisions.
Luiz Inacio Lula da Silva, 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.
Canadian Finance Minister Jim Flaherty expected central bankers to continue discussions about joint action on interest rates to counter the blow to growth from the credit crisis.
"I expect that these discussions will lead to some degree of coordinated action," Jim Flaherty told reporters, commenting on the possibility of further coordinated rate cuts.
"There are ongoing discussions about who plans to do what, when," he said.
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.