Financial market reforms top G20 summit agenda

Financial market reforms top G20 summit agenda

All countries need to provide a political leadership that was lacking earlier: IMF

Financial market reform will be a central issue at the summit but Obama’s US regulation agenda has moved slowly in Congress. In his weekly radio address he sought to show other countries that his administration is serious about tackling US shortcomings blamed for triggering last year’s the crisis.

“As the world’s largest economy, we must lead, not just by word, but by example,” he said, adding “we know we still have a lot to do, in conjunction with nations around the world, to strengthen the rules governing financial markets and ensure that we never again find ourselves in the precarious situation we found ourselves in just one year ago.” Merkel, in her weekly online podcast, said she was ‘thoroughly optimistic’ about the talks in Pittsburgh because the European Union would be able to speak there with one voice. She said the summit must take a step forward from the G20 gathering hosted by Britain in April.

“We need to get well beyond the agreements made in London, we can work toward ensuring a crisis like this is not repeated worldwide. That must be our goal,” she said.

Bonus culture

Obama and Merkel took aim at the ‘bonus culture’ in the banking industry with the German Chancellor saying bankers must not be allowed to claim bonuses for running up losses. Obama echoed by saying, “We cannot allow the thirst for reckless schemes that produce quick profits and fat bonuses to override the security of our entire financial system and leave taxpayers on the hook for cleaning up the mess.” Fed sources said on Friday, the US central bank was near to proposing wide-ranging rules to apply to any banker able to take risks that could imperil an institution.

IMF Managing Director Dominique Strauss-Kahn, said that G20 nations had to provide the political leadership that had been lacking in past...

Emerging nations seek stronger voice

Emerging nations heading to the G20 summit in Pittsburgh, including India and China will push for a stronger voice in major world bodies and fight their corner in a looming showdown over who should foot the bill to combat climate change reports AFP.
The BRIC (Brazil, Russia, Inadia & China) countries and South Africa are seeking greater representation and voting rights at the International Monetary Fund (IMF) and the World Bank to reflect their growing economic clout.

At a London meeting earlier this month, BRIC finance ministers said they were seeking a seven percent shift of IMF quotas toward developing countries and emerging markets after lending their support to G20 plans to triple the institution’s lending capacity to 750 billion dollars.