Washington - Winding up the Washington summit on Saturday of
the leaders of the world's top economies, US President George W Bush
stressed the speed with which the meeting had been pieced together.
The Group of 20 (G20) government chiefs attending the summit
called for a series of rapid moves to face up to the fallout from the
financial crisis that has recently engulfed global markets.
But much of the complicated work of overhauling the global
financial regulatory system has been handed to finance ministers who
have until the end of March to report.
'A meeting is not going to solve the world's problems,' Bush told
reporters.
In reality, a meeting that he called to help demonstrate his
statesmanship in the dying days of his administration has in effect
passed over to president-elect Barack Obama's White House efforts to
steer the international community to a new financial world order.
Obama launched a scorching attack on regulation of Wall Street
after the financial crisis took centre stage in the final months of
the presidential election campaign following the collapse of the
giant US banking group Lehman Brothers, which sent global markets
into a tailspin.
More to the point, the market turmoil and the deepening economic
gloom in the US were key factors in helping to propel Obama towards
the White House.
But the president-elect, who did not attend Saturday's meeting,
has still not set out in detail how he believes financial markets
should be regulated in the future.
In their declaration following the Washington meeting, the G20
leaders, which include government chiefs from both the world's
leading industrial nations as well as major emerging economies,
agreed to hold another summit at the end of April.
It would review the progress of the steps taken to try to avert
financial crises like the one that recently hit global markets and
pushed the world economy into sharp decline.
In their five-page communique, the leaders pledged to take
specific steps during the next three months to boost and modernize
bank supervision as well as ensuring that credit-rating agencies meet
'the highest of standards and avoid conflicts of interests.'
At the same time, the leaders called on governments around the
world to step up public spending in a bid to spur growth in the face
of fears that the key economies could sink into recession next year.
The leaders have also decided to buy into the thorny subject of
executive pay by proposing to review how top business leaders' pay
scales may exacerbate cyclical trends.
This mirrors the moves already underway in several nations where
big bonus payments have become a target of criticism especially in
the wake of the collapse of leading banking groups.
Other measures envisaged by the leaders attending the summit could
also take long to thrash out and to establish.
One of the more difficult questions is how to rebalance the power
structures of the world's top financial institutions such as the
International Monetary Fund, the World Bank and the Swiss-based
Financial Stability Forum to reflect the growing economic clout of
the leading emerging economies.
The summit has also called for the creation of new financial
market watchdogs, a so-called 'college of supervisors' to monitor all
major cross-border financial institutions and the exchange of
information.
Senior US officials stressed that many of the measures set out in
the summit communique and the accompanying action plan formed the
basis of any moves to bring financial market regulation into line
with the changes unleashed by fast-paced globalization.
Indeed, in his closing remarks, Bush singled out a proposal to
create a central clearing house to enable supervisory authorities to
keep check on the risk of investment tools such as credit-default
swaps. Many believe the 60-trillion-dollar credit-default swaps
market played a key role in the recent crisis.
Equally, it will take some time for other measures set out in the
declaration, such as strengthening global financial transparency,
accountability and disclosure measures, to ultimately change
financial market culture.
USA
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