Bush defends free market system ahead of G20

By Tabassum Zakaria

NEW YORK (Reuters) - U.S. President George W. Bush on Thursday offered a vigorous defence of the free market system, but acknowledged there should be some reforms to correct the problems that led to the global financial crisis.

On the eve of hosting the Group of 20 leaders in Washington, Bush goes to Wall Street Thursday to outline his agenda for that summit which will kick off efforts to reform the global financial regulatory system.

"While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth," Bush said in prepared remarks of his speech released in advance. "And the surest path to that growth is free markets and free people."

The G20 meeting brings together key emerging-market countries like China, India, Brazil and South Africa with the so-called Group of Seven industrial nations to begin examining the causes of the turmoil and figure out solutions.

Governments have already thrown hundreds of billions of dollars into the markets in a bid to thaw frozen credit markets, calm jittery traders and prevent the global economy from spiralling into a recession.

While some leaders have called for undertaking big reforms to the financial system, the Bush administration so far has been more cautious. There have been questions whether differences could be bridged to achieve tangible progress.

The leaders will dine at the White House on Friday and meet during two plenary sessions on Saturday.

Bush warned in his speech that the crisis would not be solved overnight but said that this weekend, leaders would set principles for adjusting their own financial systems and discuss actions that they can take to implement them.