G-20 Nations Agree on Need for More Cooperation, Mantega Says

By Joshua Goodman and John Brinsley
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Oct. 11 (Bloomberg) -- Finance officials from the Group of 20 countries agreed on the need for a more coordinated response to the biggest global financial crisis in 80 years, Brazilian Finance Minister Guido Mantega said.

``The G-20 needs to be more agile, and transform itself rapidly so it can resolve the crisis,'' Mantega, chairman of the G-20, said at a press conference in Washington. The comments came a day after the Group of Seven finance chiefs pledged joint action to alleviate the credit crisis and prevent major banks from collapsing.

In a statement, the G-20 countries ``committed to using all the economic and financial tools to assure the stability and well functioning of financial markets.'' Officials will next meet on Nov. 8 and 9 in Sao Paulo, the statement said.

Policy makers are grappling with how to contain a collapse in equity markets from Reykjavik to Sao Paulo. Stock markets in Indonesia, Russia and Ukraine suspended trading last week, as the crisis sparked by U.S. subprime-mortgage defaults threatened the solvency of banks and corporations around the world.

``The thesis that there would be no spillover is no longer valid,'' Mantega said. ``It now has migrated into emerging countries. We are now facing a world-wide crisis that must be dealt with by all governments.''

The special meeting, during the annual gathering of the International Monetary Fund and World Bank, reflects the rising importance of emerging markets such as China and Russia to the world economy as richer nations slide toward recession. Merrill Lynch & Co. predicts the gap in growth between emerging and developed markets next year will be four times the 1990s average.

President George W. Bush made an appearance at the meeting, hours after hosting the G-7 ministers at the White House. Bush earlier said the U.S. has ``a special role'' in coordinating a global solution to the crisis.

``It doesn't matter if you're a rich country or a poor country, a developed country or a developing country -- we're all in this together,'' Bush told the group, according to a statement released by the White House. ``We must work collaboratively. We take this seriously, and we want to work with you.''

The G-20 consists of the G-7 -- the U.S., U.K., Germany, France, Italy, Canada and Japan -- plus countries including Argentina, Australia, Russia, China, Indonesia, Saudi Arabia and Mexico.

To contact the reporters on this story: Joshua Goodman in Washington at jgoodman19@bloomberg.net; Simon Kennedy in Washington at skennedy4@bloomberg.net