Brazil urges finance overhaul, Obama vows action

By Elzio Barreto and Deborah Charles

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.