Key issues must be resolved during Thursday
By Steve Schifferes
Economics reporter, G20 London Summit
As world leaders sit down to start their summit deliberations, they have only a few hours to reach agreement on plans to revive the world economy.
The leaders will concentrate their discussions during the day on just a few key issues, hoping to reach agreement in time for the communique scheduled to be released at 3:30pm.
Much work has already been done on the draft communique by officials, but leaders will have to sign off on some concrete numbers that will make the rhetoric a reality.
On what was once the biggest issue of the summit, the need for a greater boost in public spending to revive the world economy, there is likely to be little comfort for US President Barack Obama.
There is little appetite for anything that would force countries to spend more money than they are already planning to on a further fiscal stimulus.
But the leaders will debate whether to put a target figure on the size of the stimulus plans announced so far and, more crucially, call for further action in 2010 - when the IMF identifies a real shortfall of G20 action so far.
The recent gloomy news about the world economy, with new downbeat forecasts from the OECD and the World Bank, will add to pressures to strengthen the language.
There has also been much progress on the issue that has been troubling French President Nicolas Sarkozy, the need for tougher regulation of the financial sector to prevent future crises.
French President Nicolas Sarkozy wants global regulation to be tough
Much preparatory work has already been done by working groups. And crucially, the US has now signed up for a broader regulation of all financial institutions, including hedge funds, despite opposition from the hedge fund industry.
The main sticking point seems to be how tough to be on tax havens. The worry here is that if the main financial centres tighten up their rules, banks will flee to off-shore jurisdictions.
But for France and Germany, the tax havens have also been a sore point because many of their citizens have been avoiding tax by putting their money in secret accounts there.
Many of the tax havens have already agreed to become more open, and there will be intense pressure on the remaining ones, including some Carribean island territories of the UK, to come into line.
There still is likely to be a fudge on how much power to give to a new body, the Financial Stability Board. It is set to become a beefed-up version of the existing group, the Financial Stability Forum, which takes an overview of the world financial system.
But there are some areas where the leaders will be asked to come up with concrete commitments of money, which is always more difficult than statements of intentions.
The biggest issue is how much extra money to give to the International Monetary Fund (IMF), whose role in providing rescue funds for countries in trouble has increased dramatically because of the financial crisis.
The Europeans want to double its current resources, from $250bn (£172bn) to $500bn, but the US has suggested it should go up to $750bn and developing countries, for instance Brazil, are holding out for $1 trillion.
How to fund such an increase is also an issue.
A number of rich countries have pledged to lend extra money to the IMF, but the Chinese would like the IMF to issue more of its own currency, the SDR, to permanently increase its funding ability.
This is not likely to be agreed at this summit, but it has opened a debate on the future of the US dollar as the main reserve currency in the world that will continue for some time.
China's voice is likely to grow stronger on this issue as there is already agreement that it will be given a bigger say in the IMF from 2011.
Other developing countries are keen to get a bigger voice too, and would like the US to be stripped of its veto power.
Meanwhile, leaders will also be asked to pledge additional funds to help the poorest developing countries who have been hit by the crisis.
Some aid charities say that Africa needs between $50bn and $500bn more in order to continue to make progress in reducing poverty.