Obama flies in to fortress London | Brown urges world leaders to unite | G20 leaders, police and protesters ready as summit comes to town | Jamie Oliver cooks for the G20 | City of London braces itself | Time to reset capitalism's moral compass | Valentine Low: Sketch | Ann Treneman: Sketch

The White House sought last night to play down expectations that this week’s G20 summit would be enough to solve the global economic crisis Mike Froman, one of President Obama’s key advisers, said: “Historically, it’s proven difficult to cooperate around international crises,” adding that the G20 had its limitations. “It is 20-plus countries, so it does take a certain degree of coordination.”

British ministers have spent the past few days playing down the likelihood of a big new coordinated financial stimulus although there is growing confidence about deals in other areas.

The Prime Minister believes that the United States has moved towards the European position on financial regulation. Ministers were heartened by an interview with Tim Geithner, the US Treasury Secretary, in which he proposed tougher capital requirements on banks, forcing them to hold larger reserves for the bad times.

Negotiators were also pleased by pledges yesterday from Japan, the world’s second largest economy, of a new fiscal stimulus there. Japanese economists predicted that it would aim to create demand worth 60 trillion yen ($612 billion) and two million jobs.

Mr Brown said that leaders should aim to save or create 20 million jobs and must act together to increase the potential impact of their actions. “Leaders meeting in London must give people in all of our countries renewed hope for the future,” he said. In a clear hint that he believes agreements on regulation and international rules on bonuses are close, he said that the task was to agree global economic rules so that systems of pay and bonuses rewarded people for long-term value and not short-term risk-taking.

The Pope made an intervention last night in a letter to Mr Brown urging him to push for an “ethical” financial system at the G20 discussions. The Pope wrote: “All the measures proposed to rein in this crisis must seek, ultimately, to offer security to families and stability to workers and restore ethics to the financial world.”

Mr Obama’s aides said he recognises that, unlike the Bretton Woods conference, when the United States was largely able to impose its design for a global financial structure, there are significant new actors on the stage whose voices America can no longer afford to ignore.

They brushed aside reports that President Sarkozy of France is threatening to walk out in protest at excessive Anglo-Saxon influence over the summit. Mr Froman insisted: “There’s a great deal of consensus and agreement among the leaders and their teams on what’s necessary.”

Mr Sarkozy, asked about yesterday’s report in The Times that he was ready to walk out, replied: “The crisis is too serious for us to hold a summit for nothing.” Christine Lagarde, the French Finance Minister, told the BBC: “It means walking away. I think he’s very determined.”

Mr Obama is having to put a brave face on the failure to secure bigger two-year spending pledges from countries such as France and Germany, which say they will not countenance further borrowing to refloat the economy. Instead, all he will get is a vague statement of intent on the need for action, with aides saying individual nations must “decide from there what makes the most sense to do”.

A similar compromise communique is expected on the issue of trade where, despite pledges from G20 leaders in November to maintain the free movement of goods, there have been repeated outbreaks of protectionist behaviour including the “Buy American” provisions in Mr Obama’s own stimulus Bill. White House aides suggested that the World Trade Organisation may be given a role in monitoring the implementation of any fresh agreement this week.

There has been more progress on measures to rein in some of the worst culprits of what Mr Obama has called the era of irresponsibility. His Administration, seeking to lead through example, has already promised to extend regulation to nonbanking financial institutions such as hedge funds and insurance conglomerates.

Britain may feel like the centre of the universe today but, according to a White House press briefing document distributed to journalists on the President’s five-nation tour of Europe and Turkey, it is a country “slightly smaller than Oregon”. The comparison appears to be based on geography – 93,000 sq miles – rather than population. The West Coast state is home to 3.7 million people.

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