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SAO PAULO/CHICAGO (Reuters) - Brazil's president called on Saturday for an overhaul of the global finance system which "collapsed like a house of cards" in the credit crisis and demanded a seat at the top table for emerging economies. In the United States, President-elect Barack Obama said it was time for Americans to put aside their political differences to focus on the crisis, which he would tackle as soon as he moves into the White House in January. The world's most powerful central bankers began discussions on how to address the threat of a global recession at a meeting in Brazil's business capital of Sao Paulo. Brazilian President Luiz Inacio Lula da Silva, a former trade union leader, warned that millions of people risked losing their jobs, causing an increase in poverty in many emerging economies that would be the fault of rich countries. "This crisis began in the advanced economies," Lula told the finance officials. "This is the consequence of the blind belief in the ability of self-regulation of the markets, and to a large degree, the lack of control over financial players." On Friday, the "BRIC" nations of Brazil, Russia, India and China for the first time forged a joint position that called for reform of institutions like the International Monetary Fund to reflect the growing importance of developing economies. Countries such as export giant China and the oil-rich Gulf states have amassed trillions of dollars in reserves that could help the IMF support smaller countries withstand the turmoil that has rocked financial markets and their currencies. Lula, long a critic of the dominance of the United States and other developed economies in the way decisions on global finance are taken, said there was wide acceptance that the elite G7 countries were no longer capable of working alone. "We need new, more inclusive governance," he said. "It is time for a pact between governments to build a new financial architecture for the world." Brazil is hosting an annual meeting of finance officials of the G20 group of the world's biggest advanced and developing economies. They are trying to prepare for an emergency summit of world leaders next weekend in Washington on the crisis. But the chance of major reform proposals appear slim, not least because the outgoing administration of U.S. President George W. Bush has played down the need for big reforms. HIT THE GROUND RUNNING U.S. Treasury Secretary Henry Paulson, like many European finance ministers, did not attend the meetings in Sao Paulo. Obama, speaking in a U.S. radio address, said it was vital that Americans put aside the divisions of the recent election campaign "and that is particularly important at a moment when we face the most serious challenges of our lifetime." He said in a radio address that he would waste no time in moving ahead to fight the crisis. "While we must recognize that we only have one president at a time and that President Bush is the leader of our government, I want to ensure that we hit the ground running on January 20th because we don't have a moment to lose," Obama said. It was not clear whether Obama would attend next weekend's summit of G20 leaders in Washington. Some European leaders have said the meeting offers a chance to lay the groundwork for big changes in the way the global financial system is run at further meetings early next year. French President Nicolas Sarkozy said on Friday that Europe backed a French-inspired agenda that included a stronger role for the IMF, surveillance of credit ratings agencies and caps on excessive risk-taking. The White House said on Saturday it saw common ground with European leaders on how to address the financial crisis and agreed on the need to move quickly with some reforms but was quiet on specifics. The head of the IMF said that leaders coming to Washington should bring with them new ideas for boosting their economies through monetary and fiscal moves, and to ensure the Fund had enough funding to do its job of helping countries survive the financial turmoil. "There is scope for fiscal expansion in many advanced and some emerging market economies; and with inflation declining, some central banks have scope for further monetary easing," IMF Managing Director Dominique Strauss-Kahn said in a letter to the G20 heads of government. Canadian Finance Minister Jim Flaherty said he expected central bankers in Sao Paulo, including Ben Bernanke of the U.S. Federal Reserve and Jean-Claude Trichet of the European Central Bank, to continue discussions about joint action to lower interest rates further and counter the blow to growth from the credit crisis. (Additional reporting by Anna Willard, Louise Egan in Sao Paulo and Jeremy Pelofsky in Washington; Writing by William Schomberg; Editing by Todd Benson and Vicki Allen) By Elzio Barreto and Deborah Charles
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