People – Bowing to Europe’s enthusiasm fora new global financial order, U.S. President George W. Bush has agreed recently to host a world summit on reforms of the international financial system.

After a weekend meeting at Camp David some 100 km north of Washington D.C., Bush said in a joint statement with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso that the summit would "seek agreement on principles of reform needed to avoid a repetition of the problems and assure global prosperity in the future."

It was regarded as a victory for European Union (EU) leaders, who are pushing hard for an overhaul of the current global financial system in the wake of the financial crisis.

Europe has become a big victim in the financial crisis, which originated in the United States. As European banks are still struggling with tight credit triggered by the U.S. sub-prime mortgage defaults, Europe learned it can hardly be separated from the United States.

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Reuters – President Nicolas Sarkozy called at a European Union summit on Wednesday for a clamp-down on hedge funds and offshore centres as part of efforts to better regulate the world financial system.

"I would propose a simple principle, that no financial institution should escape regulation and supervision," he said according to a copy of a speech to the EU summit in Brussels.

"I am thinking, for example, of the regulation that we must apply to the rating agencies, and of the necessary supervision of hedge funds…We must also work to eliminate the grey areas that undermine our efforts at coordination, in this case the offshore centres," he said.

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