Leading article: The summit which marks the changing of the old order

Nothing emerged from the G20 meeting in Washington at the weekend that gives the financial markets great cause for bullishness today. There were no promises of co-ordinated interest rate reductions, or global tax cuts. There was support from the leaders present for "fiscal measures to stimulate domestic demand", which is likely to give Gordon Brown the cover he needs to cut taxes in a week's time, but nothing more definite. There were also some warm words on reinvigorating global trade talks, but nothing earth-shattering.

Yet though the markets will not be ecstatic at the outcome of the Washington get-together, we should not write it off as a waste of time. The symbolism of the powers which represent some 85 per cent of global economic output coming together with the express purpose of heading-off a prolonged international recession should be important in shoring up the confidence of investors around the world.

The markets now know that world leaders are treating this crisis with the seriousness it deserves. And the collective forswearing by the G20 of any new export or investment restrictions over the next 12 months should help settle any fears that the world is about to undergo a lurch into disastrous protectionism.

It is also possible to discern in the final communiqué of the summit the beginning of several promising new departures. One of the most significant consequences of the credit meltdown since last year is that the old "West" has shed a considerable degree of economic authority. Sovereign wealth funds from the Middle and Far East have taken a sizeable share of some of the top banks in Britain and America. Those same players have been asked to fill the coffers of the International Monetary Fund to bail out emerging economies stricken by sudden capital withdrawals. The communiqué made clear that this new economic reality will be reflected in the governing arrangements of the IMF and the World Bank.

Furthermore, with Europe, Japan and America on course to see their output shrink next year, global growth will be almost entirely reliant on the industriousness of countries such as China, India and Brazil. The Brazilian President Luiz Inácio Lula da Silva observed that the old G8 is now irrelevant, and that the grouping that now matters is the G20. He is right. The international economic order is changing fast.

Other orders are changing too. There is a strong emphasis in the communiqué on regulating capital markets. Despite the lack of detail, it would be impossible to come away from reading the text with the impression that it will be business as usual for the big players. One way or another, the world's large banks and financial institutions will have to be much more transparent regarding the risks they take. They will also have to be much more conservative over the amount of debt they underwrite in the good times and the lavishness of the management "incentives" they pay out. It seems that high finance will henceforth need to get used to some unaccustomed restrictions.

This new regulatory architecture is a work in progress. A second summit has been called for April next year when a new American President will be in post. The building will be the work of many months, more likely years. But if the project is followed through to completion, as we hope it will, this weekend's G20 meeting might go down in history as a more significant moment than many are presently minded to regard it.

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