FRANKFURT (Reuters) - Global leaders are considering a new world financial order in the wake of the financial crisis which is threatening to tip the global economy into recession.

European Union leaders meet on Friday in Brussels and Group of 20 central bankers and finance ministers gather in Sao Paulo at the weekend ahead of a G20 leaders’ summit in Washington on November 15.

The meetings aim to thrash out potential changes to the global financial architecture set out in 1944 at the Bretton Woods conference, which established the International Monetary Fund and the World Bank and laid the foundations for the dollar to become the cornerstone of world currency exchange.

The Washington summit will be the first in a series of such meetings to apply lessons learnt from the worst financial market turmoil since the Great Depression of the 1930s.

Below are possible features of the new financial system.

FIRMER FINANCIAL REGULATION

- EU finance ministers have backed principles for a root-and-branch revamp of how the world’s capital market is governed and how banks and credit rating agencies are run.

- The EU says supervisory colleges should be rapidly established for all significant cross-border firms; risk control mechanisms in financial institutions should be improved; a code of conduct should be drawn up to tackle excessive risk-taking, and accounting and prudential standards should be more consistent.

“We have in mind ... the fact that we should not over-regulate, not overshoot, but clearly we also want to make sure that we do not leave loopholes or dark holes in the regulations where either products, players or territory would be left completely without such regulation,” French Finance Minister Christine Lagarde said.

LESSER ROLE FOR U.S. DOLLAR

- The U.S. dollar has been the linchpin of the world financial system since 1944, when the Bretton Woods conference agreed on a pegged exchange rate system with the dollar as the effective reserve currency.

- Although this collapsed in 1971, when the dollar stopped being convertible into gold and gave way to the current model of freely floating currencies, the dollar has remained the favored international currency, although the euro runs a close second.

- Countries including Italy are keen to broaden the base. “Today the dollar is the currency of Bretton Woods, but now it could be that there will be other combinations. The debate on foreign exchange is being reopened,” Italian Economy Minister Giulio Tremonti said on October 15.

STRONGER ROLE FOR INTERNATIONAL INSTITUTIONS

- British Prime Minister Gordon Brown has said the key role in supervision should go to the IMF and the Financial Stability Forum (FSF), which have no binding powers of enforcement. He has called on Saudi Arabia, China and other relatively wealthy countries to help raise hundreds of billions of dollars to boost the IMF’s resources.

- Europe favors an expansion of the FSF, a body consisting of regulators, central bankers and finance ministry officials from the G7 and other major economies, as well as international financial institutions and supervisory groupings, headed by Italian central bank Governor Mario Draghi.

GREATER DEPENDENCE ON TAXPAYERS’ FUNDS

- Authorities are trying to soften the impact of the economic downturn with support for banks, cheaper lending and stimulus measures, which have already amounted to around $4 trillion and will push up budget deficits around the world.

- Germany’s cabinet agreed a package of measures on Wednesday to give Europe’s biggest economy a 50 billion euro ($64.2 billion) boost and protect about 1 million jobs, following a 500 billion euro bank rescue package last month.

- Societe Generale economist James Nixon said policymakers were turning more to old-fashioned models such as direct fiscal stimulus to find a solution to the financial crisis. “We are back into an environment where you have to look at more Keynesian-style solutions which have been out of fashion for 30 or 40 years,” he said. Keynesianism is based on the theories of UK economist John Maynard Keynes and includes a belief in active government and the benefits of public spending to boost growth.

EMERGING ECONOMIES TO HAVE BIGGER SAY

- The World Bank and the IMF are dominated by G8 members -- the United States, Russia, Japan, Canada, Britain, France, Germany and Italy -- even though a country such as China now has a bigger economy than many of them.

- Reformers say it is essential for developing countries to take a bigger role in the global system, including the IMF.

- The World Bank is calling for an expansion of the club of the world’s richest nations -- the Group of Eight -- to include rapidly expanding economies of China, India, Brazil, Mexico, Saudi Arabia and South Africa, which together would represent 62 percent of global gross domestic product.

- “Any new architecture that comes out of the Washington meeting, we need to have proper representatives including emerging countries on the one hand and of course Europe on the other,” EU Economic and Monetary Affairs Commissioner Joaquin Almunia said.

- Gulf Arab states have also called for a bigger role in setting global economic policy and the EU backs a bigger role for emerging economies such as India and China at the IMF and the G8.