Business | Economy
G20 closes in on deal to detect risky investing and weak spots
Leaders eye tougher accounting rules and greater transparency.
- AP
- Published: 23:41 November 15, 2008
- Financial crisis focus of Dubai meet
- Gulf growth still on track
- Stimulus plans lift Shanghai amid wider gloom
- Recession gloom sets the mood in the euro zone
- World leaders vow action against crisis
- US to debate $25 billion auto bill
- IMF board to meet on $7.6b Pakistan credit
- Recession deepens ahead of crisis talks
- Calls to reshape financial order
Washington: European officials at the extraordinary Group of 20 summit in the US capital yesterday said a draft agreement among the world leaders likely would call for intensified government efforts at bolstering national economies, cooperation on international regulation of the financial system and reform of global structures to aide needy developing countries.
Signalling a shift away from the traditional global economic dominance of the United States, the European Union and Japan, developing economic powerhouses from China to Brazil took a seat at the meetings.
The International Monetary Fund has reported expectations that worldwide growth next year would be fuelled by such countries even as US, EU and Jap-anese economies shrink.
In comments to reporters on Saturday, German Chancellor Angela Merkel noted the shift.
"It is the first time that emerging and developed countries are meeting together in this way and are really in with both feet. In this respect it is a new beginning in a very, very difficult situation. It gives hope that policies can operate jointly," she said. "The world financial summit will adopt an action plan here today and thus demonstrate the international community's ability to act."
British Prime Minister Gordon Brown said early yesterday that world leaders were making progress in what he termed difficult talks, but that final agreement on the particulars of global regulation and reform were not likely to come out of the Washington meeting. He added, however, the assembled leaders would be able to agree on "quick action results," on fiscal policy, like tax cuts or public spending increases.
Related Links
President George W. Bush agreed that there was progress at the summit, with world leaders moving closer to a deal to better detect risky investing and regulatory weak spots.
But, he said, the crisis has not ended and much work needs to be done.
Before the leaders began their talks yesterday, Bush said he was pleased that they are discussing a way to move forward.
Coordinated response
European officials, speaking on condition of anonymity because the draft agreement was still under negotiation, said a follow-up meeting was likely in April in London, Paris or Tokyo, after President-elect Barack Obama takes over in the White House.
In a radio address Obama said he was pleased Bush brought world leaders to Washington to discuss turmoil in the financial markets, "because our global economic crisis requires a coordinated global response." In an effort to avoid surprise calamities like the one now sweeping the globe, the assembled leaders were expected to focus on a commitment to tougher accounting rules and greater transparency. They formally opened the session with an sumptuous White House dinner before getting down to business yesterday in closed-door talks.
The leaders were on track to approve measures to make the world financial system more accountable to investors and more transparent to regulators, officials said.
That would included more effective accounting rules governing how companies value their assets, a weakness seen as partly responsible for the current financial crisis.
A new early warning system would look for signs of problems like those in the US housing market and related overuse of mortgage-backed securities.
On Friday, the heads of the International Monetary Fund, the world's financial firefighter, and the Financial Stability Forum, a group that includes central banks and major financial regulators, said they would cooperate on "early warning exercises" to detect vulnerabilities.
Also, a new "college of supervisors" would gather global regulators to scrutinise the world's largest financial institutions together to compare notes as they seek to spot excessive risk-taking.
The president-elect stayed away from the meeting, but designated former Secretary of State Madeleine Albright and former Rep. Jim Leach to represent him in meetings with leaders on the sidelines.
In addition to Brown, leaders from France, Germany, Russia, China and India were among those in Washington.
Business Editor's choice
-
Saudi-Bahraini economic ties hit new high
Whilst press reports continue speculating on a possible new political structure defining ties between Saudi Arabia and Bahrain, facts on the ground confirm ever- stronger economic ties between the two neighbours
-
Cupid targets the Fed with early tweets
Declarations range from pure romance to cute overtures and racier fare
-
Do unemployment figures flatter to deceive?
Jobseekers and recruiters give out mixed signals ranging from optimism to downright despair even as official data show recovery
