THE Washington financial summit was not designed to produce a consensual plan for global financial regulation. It would be a wonder if subsequent sessions of the G-20 could reconcile tight regulatory control of hedge funds and credit-rating agencies - blamed by some quarters as enablers in the markets crisis - with the need for proprietary risk assessment by individuals, institutions and governments in all classes of complex products. The attendees, at least the G-3 and the big rapidly industrialising countries (BRICs), did well enough to signal their determination to prevent another market failure with a series of industry clean-ups, like accounting standards convergence, backed by government fiat where feasible.

The conference achieved more in reassigning the relative weight of the BRICs in the new global financial grid, specifically China, and in giving a push to the Doha Round of world trade negotiations. China's President Hu Jintao went to the meeting with the aura of his country having set the rich nations an example in reflating faltering economies with deficit spending. It was a letdown that there was no appetite for coordinated stimulus packages to give the most productive economies a lift. But the expectation is that America, under President-elect Barack Obama, and individual European Union states like Britain, will support China's initiative in due course. The world needs this.

China's stock will also rise appreciably if it plays a sizeable role in the lending operations of the International Monetary Fund (IMF). The IMF will be forced to reform itself in short order to recognise the altered economic power structure, with China and other BRICs assigned big voting shares commensurate with their contributions and clout. Remarks by Beijing officials point to China being willing to pay substantially into the Fund - not least, so as not to be eclipsed by Japan which will increase its lending by US$100 billion (S$150 billion). It cannot be long before Europe gives up its prerogative to have a European heading the IMF. The power balance is shifting.

For more The Straits Times stories, click here.