The G-20 is a consortium of the world’s 20 most powerful economies. These leaders have descended on London amid protests and scrutiny as the world faces what may be the most challenging economic scenario it has ever witnessed.

Some of the players are familiar: the U.S., Great Britain, Germany, France, Japan… Some were expected, like China, Russia, Brazil and India.

But some are a bit surprising, like Indonesia, Turkey and South Africa.

Together, these 20 countries represent about 85% of the world’s wealth. And this summit, starting on Thursday, will be all about preserving that wealth and how to get the global economy back on track.

British Prime Minister Gordon Brown says that the world needs a “New Deal.”

He said in a G-20 primer meeting last month, “We need a global New Deal – a grand bargain between the countries and continents of this world – so that the world economy can not only recover but... so the banking system can be based on... best principles.”

With a fresh U.S. president that has been echoing the same call for the U.S. economy, à la FDR, could this be the direction the G-20 takes?

It’s not a lock. Germany has resisted the call for more stimulus packages. And Australian Prime Minister Kevin Rudd has said, “There was ‘never the intention’ for the Thursday meeting to produce an agreement on a further round of fiscal stimulus,” according to MarketWatch.

Indeed, nothing about a global stimulus plan has been found in any remarks or papers regarding the meeting except to say that any effort must be coordinated.

But, The Wall Street Journal reports, “According to a draft of the communiqué set to be released when the meeting adjourns, the G-20 leaders will tout a global bailout totaling up to $2 trillion, though that includes a host of measures already announced.”

So where does that leave expectations?

Somewhere short of the prospects of any type of “New Deal”…

The new focus will most likely be on regulation, something that’s been heavy in the news recently.

The targets will likely be the same, too: hedge funds, derivative markets, executive pay and bonuses, and risk taking.

U.S. Treasury Secretary Tim Geithner has proposed more oversight for U.S. markets and institutions, and it would appear as though the international community is following suit, and could be using the U.S. proposal as a blueprint for more regulation in their own markets.

Interestingly, the Chinese government has been calling for more regulation as well. And, like Geithner wants a Financial Regulation Czar, the world might be looking for the same.

Bloomberg notes, “Kenneth Rogoff, former chief economist of the International Monetary Fund says that ‘it seems virtually certain that four to five years from now, the world will have either a global financial regulator or, more likely, a treaty on global financial regulation with a secretariat, akin to the World Trade Organization.’”

Justice Litle, editor of Macro Trader, writes, “New regulatory efforts won’t mean a hill of beans... expecting Congress to rein in Wall Street is like asking the Keystone Cops to chase down Lex Luthor. Worse still, I strongly suspect that all the guff about ‘never again’ and a new regulatory regime is just more smoke screen – more means to placate a gullible public while concentrating ever more power in the hands of the powerful.”

So what does that mean for markets? Justice acknowledges that the short-term implications mean support, and even little rallies.

“When you sell your soul to the devil, good things generally happen in the short term,” he says. “It’s the long term you have to worry about.”

Originally published March 30, 2009.

Other Related Topics: Economic Crisis , Global Recession , Sara Nunnally , Stimulus Plan , Taipan Insider

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