Favouring a 'new Bretton Woods Agreement', International Monetary Fund chief Dominque Strauss-Kahn has said an early warning system to detect impending dangers to the world economy must be put together by international financial expertise.

In a letter to the heads of the government of the Group of 20, who are meeting in Washington later this week for a summit of the global financial crisis, Strauss-Kahn argued there are two immediate broad tasks ahead -- dealing with the fallout of the immediate crisis as well as dealing with the longer term global architecture.

US President George W Bush has called for a G-20 Summit on Nov 15, which will see participation of the heads of the World Bank, IMF and UN Secretary General Ban Ki-moon and will also be attended by Indian Prime Minister Manmohan Singh.

"An early warning system to detect impending dangers to the world economy must find a way of bringing together the scatter of international and national macrofinancial expertise," IMF Managing Director Kahn said.

The IMF official said while he is for a 'new' Bretton Woods Agreement, the foundations of this would have to be laid after vigorous discussions of the underlying issues, as was done in the first and original arrangement.

"There have been numerous calls in recent months for a 'new Bretton Woods agreement,' which I strongly endorse. One important lesson of the original agreement was that its foundations were carefully laid through serious and vigorous discussion of the underlying issues.

"I very much welcome the initiative taken by the US President to bring together G-20 leaders. . . to culminate efforts in a conference, hopefully within the year ahead," he said.

Strauss-Kahn emphasised that as far as the longer term financial architecture is concerned, a re-think of the design of financial regulation is needed and a representative group of key policy makers needs to be put in place.

"Forewarned, the world must also be forearmed with a mechanism for effective action. There is a need for a suitably sized and representative group of key policymakers able to agree on a consistent approach that might frame follow up at the national and multilateral levels," Strauss-Kahn said.

The head of the IMF has argued that as far as the near term is concerned more "must" be done to exit from the current crisis, but protectionist approaches should be prevented.

"Additional monetary and fiscal policy response needs to be on the agenda. We also need to keep in mind that all countries will need to resist protectionism as a reaction into the downturn," Strauss-Kahn said in his letter to the leaders.

He said emerging markets are under great stress as capital flows that have sustained growth dry up across the board.

"The IMF, working closely with the World Bank, will continue to provide financial support, but it is also imperative that aid flows are maintained so that the hard won gains of the last few years are not jeopardised," Strauss-Kahn said in his letter dated November 6, which was released now.

"For this reason, the fund has moved rapidly to assist several countries with financing and policy advice, and also put in place a new short-term liquidity facility (STLF) to provide rapid financing for countries with strong fundamentals," he added.

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