For the first time, world leaders would pledge to regulate major hedge funds and establish a new oversight board to monitor the global financial system, reports said citing a draft of the G-20 communique. The leaders would vow to cooperate over economic policies to restore global growth and refrain from competitive devaluation of their currencies.

The G-20 Summit officially kicked off in London at the Excel Center Thursday morning. The world is looking up to the summit, anticipating a plan to alleviate the worst global economic crisis in decades.

The French and the Germans are insisting on regulatory changes to the global financial system, hoping to prevent banks playing fast and loose from driving the world into another major crisis. Meanwhile, the U.S. is looking for the European Union nations to boost spending in an effort to stimulate a consumer-led recovery.

The five pledges included in the communique are restoring growth and jobs, repairing banks and lending, strengthening global financial institutions to deal with the crisis and preventing future ones as well as promoting global trade and building a sustainable recovery.

The draft communique would reportedly strengthen the authority of the International Monetary Fund, or IMF, making it more responsible for overseeing the world economy, at the same time preventing future crises, and new resources would be made available to the agency.

The draft document envisions a new Financial Stability Board, replacing the Financial Stability Forum, which would work with the IMF, monitoring the world economy and financial system.

Meanwhile, a CNBC report quoting UK Business Secretary Lord Peter Mandelson said the country is ready for reforms of the IMF and the World Bank, which would give more say to developing countries and end Western hegemony at the top of the two institutions.

The heads of the two institutions have come from Western Europe and the US since their inception. Developing countries such as Brazil have asked for a change in this tradition, and for the allocation of more resources and more clout for developing nations.

Developing countries should also be able to access more resources from the IMF to boost their economies, which in turn would benefit developed nations, Mandelson said, the report added.

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