Before we write-off this weekend's G20 meeting as a talkfest, let's appreciate the fact that countries outside Europe and North America are finally getting a seat at the table

Pondering the G20 summit that starts in Washington DC tomorrow is enough to make your head hurt, but what we can safely presume is that this is just the first of many, many meetings to re-design the world's financial systems. We will be hearing about "new global financial architecture" for months, maybe years, to come.

If you're wondering what all the fuss is about, the G20 is an organisation set up in 1999 as a response to the Asian financial crisis and a growing recognition "that key emerging-market countries were not adequately included in the core of global economic discussion and governance". The 20 in G20 is made up of 19 countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States – and the European Union. Together, they represent about 90 percent of global GNP. Spain, reasonably enough, has wangled a seat at this meeting, but it's fair to say there are plenty of other counties feeling they deserve a say at forums like this one. Say, UAE, Sweden, or, I don't know, New Zealand, for example.

The talk is that this meeting would be "Bretton Woods II". Bretton Woods, New Hampshire, was where delegates from all 44 Allied nations met in July 1944 to sign off on a post-war world financial order. The World Bank and IMF were created there, as was America's dominance of the global economy. All countries present tied their currencies to the US dollar and the US linked its currency to gold. The Bretton Woods system collapsed in 1971, but for a generation it gave western economics some rules to play by.

For those hoping for some new rules from this weekend's meeting, patience is counselled. The Bretton Woods system took two years to design and was put together by countries confident that they were about to win a world war. This time round confidence and the political capital that goes with it are sadly lacking.

President George Bush, as lame a lame duck president as ever there was, is hosting the meeting. President-elect Barack Obama won't be there. The EU wants to reform the IMF and World Bank, Russia wants new global organisations altogether, and like an obese diabetic defending his love of chocolate, Bush is downplaying the need for any new regulation, insisting that free-markets will "help show the way back to economic growth and prosperity". It's hardly an inspiring start.

Finance ministers and central bank governors of the G20 countries, who just met in Brazil last week, agreed that:

...the current financial crisis is largely a result of excessive
risk taking and faulty risk management practices in financial markets,
inconsistent macroeconomic policies, which gave rise to domestic and
external imbalances, as well as deficiencies in financial regulation and
supervision in some advanced countries.

They didn't agree on much else. Not much else that's concrete anyway. Their communique was full of Miss Universe-like promises to design "measures" to restore growth, "review" the adequacy of the IMF and World Bank, "urgently take forward work"... You get the idea.

Still, cynically dismissing the meeting is too easy, and misses a couple of crucial and positive points. The work has to start somewhere and once Bush is gone, what this weekend should make clear is that there is a global consensus for some sort of financial reform. Amidst the finance-speak a will for global financial regulation seems to be growing, and that's vital. The markets over the past decade or two have been innovative in ways the law-makers could barely comprehend, let alone control. In other words, market traders have been using electricity while governments have been regulating candles and matches. New, international regulations are vital.

What shape they will come in is anyone's guess. It may be simpler and quicker to reform the IMF and World Bank or they may have too much baggage and may need to be killed off. The new regulations may try to enforce common standards across the world or they may simply establish some core principles, leaving it to different countries to apply them as per their domestic circumstances and abilities.

But what seems inevitable now is that emerging countries will finally have a say whatever economic organisations and regulators emerge. And that's the second thing to feel positive about this weekend.

The IMF and World Bank have been toys Europe and America wouldn't let anyone else play with. Surely they – the US especially – now feel enough shame to realise that they've failed in their stewardship role and need help.

The Brooking Institution three weeks ago wrote that, "This crisis and the G20 summit on November 15 provide a historic opportunity for the next president of the United States to chart a new course for global cooperation, overcoming the transatlantic and Western biases of recent years, integrating Asia and other emerging economies into the global leadership forum, thereby creating a more effective and legitimate global steering mechanism."

The next president of course won't be there, but Obama seems likely to be open to sharing some power with other countries. At the very least, it means that he can share some of the blame as well. But not even a "liberal, elite" president like Obama will cede US economic supremacy lightly.

Indeed, while all the of the world leaders on display this weekend are sure to talk about new beginnings – and the confidence that should give the markets should not be dismissed – the truth is that this forum begins a new tug-of-war between national sovereignty and international regulation. Capital and markets aren't constrained by nation states; governments are. How, and how far, the rule-makers follow the traders across borders are perhaps the hardest of all the hard questions that this crisis is forcing us to address. There is no answer, of course. The tug-of-war is endless. But these politicians have to find some global answers with some global regulations enforced by some global policemen or the traders will make monkeys of them again.

Former Canadian prime minister Paul Martin is one of the few men so far to have had his reputation enhanced by this crisis. He resisted pressure to deregulate the Canadian banking system and Canada has been relatively un-crunched by the credit crisis. As he told Foreign Policy, "The only answer is ongoing dialogue between regulators, constantly trying to stay, if not a step ahead, at least up to speed with the market".

That can only be done if we get past this amero-centric world view and allow smaller and emerging nations more sway in whatever system emerges. Consider China – it holds a quarter of the world's hard currency reserves and could be the world's largest economy by 2025. Yet it isn't even part of the G8. Then there's India, Brazil, Chile... Poorer countries, while they don't have complicated financial systems at risk from this crisis, are battling to deal with dropping first-world demand. Relative to a year ago, prices of industrial metals are down by 45
percent, energy prices by 32 percent, and agricultural prices by 24 percent. As immigrant workers in the developed world are laid off, the amount being sent home to the developing world in the form of remittances is falling. This is not a problem for the old boys' network to fix alone.

In his interview with Foreign Policy, Martin continued:

The G-20 leaders should use this meeting to begin the reform of other institutions. The fundamental flaw in the G-8 is that it no longer [includes] the major economies: Brazil, India, and China. Brazil and others are not permanent members; they are only guests by sufferance. This makes no sense. Do what you think is necessary with the Bretton Woods institutions, but for heaven’s sake, stop keeping half the world out of them! My view is that a vibrant G-20 will become the instrument of reform.

So perhaps the most significant thing to come out of this weekend's meeting is that it has been held under the auspices of the G20 rather than the G8. The tent is getting just a bit bigger. That, to steal a line of the times, is change we can believe in. And it promises more significant change to come.