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

President George W. Bush makes remarks at the 2008 Bishop John T. Walker Memorial Dinner where he received the Distinguished Humanitarian Service Award in Washington, DC, November 12, 2008. REUTERS/Joshua Roberts

On the eve of hosting the Group of 20 leaders in Washington, Bush went to Wall Street to set out his views and agenda for the summit that 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 at Federal Hall on Wall Street. “And the surest path to that growth is free markets and free people.”

He made his argument even as the U.S. government has set billions of dollars for taking stakes in banks to help jump start lending again. “I’m a market-oriented guy, but not when I’m faced with the prospect of a global meltdown,” he said.

Bush also encouraged leaders to consider some reforms like those for the international financial institutions.

The G20 meetings on Friday and Saturday brings together key emerging-market countries like China, India, Brazil and Saudi Arabia with the so-called Group of Seven industrial nations to begin examining the causes of the turmoil and plot solutions.

The leaders will dine at the White House on Friday and hold two plenary sessions on Saturday followed by a luncheon and a statement by Bush.

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 spiraling into a recession.

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

While Bush warned in his speech that the crisis would not be solved overnight and there would be more “difficult days ahead,” he said that this weekend leaders would set principles for adjusting their own financial systems and discuss actions they can take to implement them.

While acknowledging that critics from across the ideological spectrum are “equating the free enterprise system with greed and exploitation and failure,” Bush argued that the crisis was not a failure of the free market system.

“The answer is not to try to reinvent that system,” Bush said. “It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe.”

Bush in his speech called for the G20 leaders to consider improving accounting rules for securities to ensure investors understand the value of the assets they are buying as well as improving regulations to reduce risk to the financial system.

As one example, Bush suggested that credit default swaps be processed through a centralized clearing house rather than through unregulated over-the-counter markets.

Bush also urged that institutions like the International Monetary Fund and World Bank be overhauled, including considering giving more voting power to developing economies as they contribute more to those institutions.

“All these steps require decisive actions from governments around the world,” Bush said, adding that “at the same time, we must recognize that government intervention is not a cure-all.”

He noted European countries have more extensive regulations and said they suffered similar problems to the United States.

The gathering will be the first in a series and U.S. officials expecting the next to occur during the first quarter of 2009, likely after Bush, a Republican, has left office and is succeeded by President-elect Barack Obama, a Democrat.