Leaders get to work on economic crisis at G-20 summit

LONDON -- Leaders of the world's rich and major developing countries began talks aimed at agreeing a new deal on the global economy at a crisis summit in London on Thursday, hoping to clear up divisions over how far to go with tougher financial regulation.

As President Obama and British Prime Minister Gordon Brown joined other leaders at a working breakfast at the ExCel center in the city's east Docklands district, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul's Cathedral.

Obama and Brown have expressed confidence that world leaders will come up with a strong agreement to address financial regulation, growth, and troubled banks. But French President Nicolas Sarkozy and German Chancellor Angela Merkel have refused calls for more government spending, and said the meeting must take concrete steps on tougher financial regulation.

Sarkozy has toned down his earlier threat to walk out of the conference, and Obama could be seen chatting informally with Merkel at a leaders' dinner Wednesday evening.

British Business Minister Peter Mandelson said the Group of 20 countries were in broad agreement to put more resources into the international economy through the International Monetary Fund and other international financial institutions.

"I'm not saying that everything is sewn up. It isn't," Mandelson told BBC radio. "I mean there are arguments, or some tensions over precisely what resources we're talking about."

Obama has acknowledged that U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying "We can only meet this challenge together."

He added that differences in the grouping had been "vastly overstated" and he played down an earlier U.S. push for bigger government spending by European governments; instead he praised their efforts.

Brown foreshadowed agreement on issues including a possible $100 billion increase in financing needed to keep global trade moving, and support for economic growth and job creation. G-20 leaders are also in general agreement on a plan to boost the funds available to the IMF to help out emerging countries.