Though details of official talks at the ‘sherpa’ level are being kept a closely guarded secret by the 19 countries gathered here for the summit of the G20 (the 20th participant being the European Union), the United States is believed to be advocating a greater role for the International Monetary Fund in overseeing the extent to which the leading world economies stick to the path of “balanced and sustainable growth.”

A U.S.-authored draft communiqué leaked by the Reuters news agency is sketchy on the precise nature of this oversight, presumably because many countries are uncomfortable with the idea of tying their national economic policies down in such a way that they lose the ability to respond flexibly to their own domestic problems.

‘No supervision without representation’ is the mantra of the developing world, even though analysts have said the U.S. proposal amounts to nothing more than institutionalising a process of “peer review.” If there is general consensus on the need to restructure the underlying global imbalances which fuelled last year’s financial meltdown, the argument goes, some agency needs to monitor whether the U.S. delivers on its promise of consuming and borrowing less and whether the Chinese come through on their commitment to step up domestic consumption.

The second set of U.S. proposals revolve around the problem of strengthening the Western banking system, which remains seriously undercapitalized and ultra risk averse. For India, China and other major developing countries, this is more of a derivative problem -- pun intended -- in that their own banks, which avoided risky investments, remain sound but their national business climate is subdued because of the credit squeeze emanating from the advanced industrialised countries.

India’s priorities going into the summit are a resumption of credit flows, fighting protectionism and reforming the governance structure and mandate of the international financial institutions. As of now, only the first of these appears to be a priority for the U.S.