The crisis proved it’s time to dump the Group of Seven and embrace the Group of 20 as the main global economic policymaker.

That’s according to Brazilian President Luiz Inacio Lula da Silva who addressed the G20 finance leaders on Saturday.

"This is a global crisis and it demands global solutions. This is the moment to formulate proposals for a substantial change of the world's financial architecture."

And the proposals have poured in. Russia’s Finance Minister Aleksey Kudrin says Russia alone made several suggestions of how to change the system:

"We have discussed the possibility of something similar to the Maastricht Treaty, but on a global level. Also, we proposed the creation of new regulatory bodies, and making sure that following their rules and regulations is mandatory for all countries. It would prevent future crises."

Negotiators agreed on a final declaration Saturday morning during the first-ever summit of the Group of 20 (G20) nations in Washington. Leaders will sign off on the agreement later Saturday, promising to close all gaps in financial regulation.

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Speaking ahead of the meeting, German Chancellor Angela Merkel said the G20 summit marked a "new beginning" for international cooperation and would ensure that "all market participants, all products and all markets will be truly monitored and regulated."

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Global stocks have been decimated by the financial turmoil that was triggered by a meltdown in the US mortgage market but has since spread to all corners of the globe.

European leaders have sought a major overhaul of global regulations to prevent financial firms from taking the kinds of excessive risks that sparked the sector's collapse, while developing countries are looking to contain the fallout from the crisis that began in advanced economies.

Leaders are also likely to instruct the World Bank to beef up its lending to developing countries, some of which are facing critical cash shortfalls.

"Laissez-faire is finished, the all-powerful market that is always right, that's finished," French President Nicholas Sarkozy said last month.

As a result, it is "necessary to rebuild the entire global financial and monetary system from the bottom up, the way it was done at Bretton Woods after World War II."

Sarkozy's history is a bit off. The Bretton Woods Agreements were actually signed in July 1944, when German troops still occupied Paris.

Europeans seem positively giddy about this weekend's meeting in Washington, where they hope to impose a new world economic order like the one Americans imposed in 1944. We "must have a new Bretton Woods – building a new financial architecture for the years ahead," says Gordon Brown, who is surely aware the first Bretton Woods was a British humiliation, with London yielding place and submitting to Washington's dictation.

Many developing countries blame the crisis on the G7 – consisting of Canada, France, Germany, Italy, Japan, UK and the US. They also put equal blame on the International Monetary Fund (IMF) and World Bank, key allies in what is often called the "Washington Consensus" – the shared values of institutions from the rich "north" who have, for more than 50 years, dictated global economic policy from a clear Western perspective.

...The tasks include strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets, reinforcing international cooperation, and reforming international financial institutions.

The leaders task their finance ministers with ensuring that the measures are "fully and vigorously implemented."

"They are responsible for the development and implementation of these recommendations drawing on the ongoing work of relevant bodies, including the IMF (International Monetary Fund), an expanded Financial Stability Forum (FSF), and standard setting bodies," the action plan said.

Immediate actions, which are to be taken before March 31, 2009,include addressing weaknesses in accounting and disclosure standards, developing recommendations to mitigate pro-cyclicality, enhancing the standards of credit rating agencies, and enhancing guidance to strengthen banks' risk management practices.

They also include enhancing regulatory cooperation between jurisdictions internationally and regionally, establishing "supervisory colleges for all major cross-border financial institutions, steps necessary to strengthen cross-border crisis management arrangements, and the expansion of the FSF "to a broader membership of emerging economies."

The official said leaders are close to giving their approval to the draft statement. He declined to be identified before the text is formally adopted.

The text is divided into two parts. A five-page document of principles calls for intensified government efforts at bolstering national economies, cooperation on international regulation of the financial system, reform of global structures to aide needy developing countries and a refusal of protectionism, the official said.

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"We pledge.... to ensure that all financial markets, products and participants are regulated or subject to oversight," the draft document says, according to the official.

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A second five-page document, called an "action plan" looks at measures intended to improve transparency and responsibility, improve regulation, improve the trustworthiness of markets, strengthen international cooperation and reform international institutions, the official said.

EU and French top officials applauded the G20 financial summit concluded on Saturday for four principles that were reached at the meeting.

"I was very happy with the results of summit," said European Commission President Jose Manuel Barroso at a post-summit joint press conference with French President Nicolas Sarkozy. "It has laid the foundation for the future."

He noted that the best summary on results of the two-day Summit on Financial Market and World Economy was the four principles, including a coordinated and concerted stimulus through the use of budgetary measures to support demand and the increase of financial assistance to emerging and developing countries and a new regulation for financial markets to prevent a similar crisis from happening again.

The other two principles he mentioned are a global economic governance more open to emerging and developing countries for more justice and efficiency and a rejection of protectionism and more openness towards exchanges.

Reforms to the International Monetary Fund and World Bank will be discussed at the second G20 economic summit next year. Britain, as the G20 leader in 2009 will take a lead in setting the meeting’s agenda.

At a press conference in the immediate aftermath of the summit Mr Brown drew attention to the passage of the communiqué relating to stalled world trade round. A new World Trade Round by the end of the year would help usher in the “open and inclusive form of globalisation” needed to prevent a damaging wave of protectionism, he said.