TORONTO – President Barack Obama urged world leaders to follow his success on regulatory reform on Friday while other countries touted their swifter progress in tackling debt mountains that threaten the global recovery.

Buoyed by a deal in the US Congress to toughen rules for Wall Street, Obama urged other leaders from the G20 economic powers to make good on promises to curb the risky bank behavior behind the worst economic crisis in 80 years.

“We need to act in concert for a simple reason: this crisis proved, and events continue to affirm, that our national economies are inextricably linked,” Obama said, calling on other leaders to match the US progress on financial reform.

He spoke before flying to Canada where the weekend's G20 meetings were preceded on Friday by talks among a smaller group of rich countries' leaders, the Group of Eight.

Burdened by surging debt, one of the main focuses of the G8 talks was the fact they are short by an estimated $18 billion on a 2005 pledge to raise aid for the world's poorest countries by at least $50 billion by 2010.

G8 leaders agreed on the need to stay focused on immediate growth goals while tackling fiscal consolidation in the immediate term, a senior US official said.

The Group of 20 club of rich and emerging economies banded together at the height of the crisis and committed trillions of dollars to fight a deep recession. Its united front is widely credited with averting an even deeper downturn.

But as economies slowly heal, disagreements are piling up over the next steps, unsettling investors who fear a splintering of policy could undermine the recovery.

"The cohesion generally evident among policymakers in dealing with the global crisis is in danger of giving way to a more divisive debate about how to manage the recovery," Credit Agricole analysts said in a note to clients.

OECD chief Angel Gurria said it was harder but no less necessary for the G20 to work together now that the recession had passed, given the need to cut debt without stifling growth and to find longer-term fixes to global economic imbalances.

“If there's a fire, we all know what to do. We get a hose, we get a pail of water, spit on it, throw Coca Cola on it or whatever to put it out,” Gurria told Reuters in an interview. “Right now the fire’s over. We saved the house, mostly, but you've got to paint it, plaster it, whatever.”

While Obama can claim leadership on regulatory reform, the United States lags behind Germany, Britain and other countries in putting forward spending cuts to curb deficits. Other G20 conflict zones include trade and China's yuan currency.

British Prime Minister David Cameron downplayed the transatlantic divisions but said smoothing out imbalances between export-rich countries and debt-laden consumer economies would require belt-tightening by America, too.

“Part of dealing with the imbalances is for the worst deficit countries to roll up their sleeves, get on with the job and make sure they are living within their means,” said Cameron whose government unveiled an austere budget this week.

The G20 pledged last year to coordinate a string of reforms by the end of 2012. Obama can boast he is meeting the bulk of those commitments. Europe has yet to come up with comprehensive rules for bank reform.

Countries such as Canada and Japan, whose banks fared better during the financial crisis, have objected to some G20 reform proposals that they say unfairly punish banks that did not contribute to the upheaval.

Japanese Prime Minister Naoto Kan, in talks with German Chancellor Angela Merkel, said the reform debate should take into consideration each country's situation.

Merkel, keen along with France and Britain to press for bank taxes more globally, acknowledged that things were “not looking so good” on that front.

Securing recovery

The G20, which spans two-thirds of the world's population, hold its summit in Toronto on Saturday and Sunday.

Demonstrators faced off against riot police about a mile from the cordoned-off city center on Friday afternoon. At least one person was arrested.

Since the G20 last met in Pittsburgh in September, the global economy has strengthened. But Greece’s debt troubles -- it was rescued by fellow euro zone countries -- have thrust a spotlight on ragged government finances in many rich nations.

The aggregate debt of the rich G20 countries is expected to hit 107.7% of GDP this year, almost three times the 37% debt forecast for emerging market economies of the G20 and up from 80.2% at the outset of the crisis in 2007, according to the International Monetary Fund.

Germany and Britain have pushed ahead with plans to curb government spending. They argue that with fiscal health comes confidence, and that breeds growth.

The United States, whose own deficits have soared to the highest level since World War Two, has urged patience, warning that the recovery may not be robust enough to withstand a simultaneous drawdown in public support.

A US official said Washington was not telling any country what to do, but wanted to make clear that the world can no longer rely on voracious US consumers for their growth.

Recent data has cast doubt on the strength of the recovery. Figures on Friday showed US economic growth in the first three months of the year was more tepid than first thought.

The United States, Europe and Asia are all banking on exports to try to make up for sluggish demand at home, setting up conflicts over trade and currency exchange rates.

Washington wants countries with trade surpluses, like China, Germany and Japan, to buy more at home. But those countries are also counting on exports to lift growth.

China seemed to defuse some of the G20 trade tension last weekend when it unexpectedly said it would ease its grip on the tightly managed yuan currency. But some economists have questioned whether the move was anything more than symbolic.

“China needs to stop giving us the runaround and deliver real change. And if it refuses, it's time to talk about trade sanctions,” Nobel-winning economist Paul Krugman wrote in the New York Times.

Should the G20 need a moment of levity, it may turn to the soccer World Cup in South Africa.

Asked if he and Merkel would watch England play Germany on Sunday, Britain's Cameron said: “There is an idea we might try and watch it together. I will try not to wrestle her to the ground during penalties, but we will have to see.”