Roadmap for the G20

by Dave

RGE 

President Bush has invited the heads of state of the Group of 20 (G20) nations for a summit on November 15 in an effort to continue responding in a coordinated way to the unfolding financial and economic crisis.  The G20group, which accounts for 90% of global GDP, includes 10 major emerging economies – including Brazil, China, India, Saudi Arabia and South Africa among others, along with members of the G8, Australia and the European Union.

Reaching a consensus on international regulatory reform will likely be one of the key issues at the meeting. While the 27 EU leaders earlier failed to agree on a joint economic strategy to tackle the coming recession in Europe, the member countries worked out a joint five-point action plan for the G-20 with the following very specific proposals:
1) Submit rating agencies to registration and surveillance, especially with a view to credit ratings’ prominent role within the Basel II capital requirement framework.
2) Adopt principles to ensure the ‘convergence of accounting standards’.
3) Decide that no market segment, no territory and no financial institution should escape regulation or at least oversight.
4) Establish codes of conduct to avoid excessive risk-taking in the financial sector, including on the ‘remuneration’ of executives.
5) Give the IMF the ‘initial responsibility’ and ‘necessary resources’ for ‘recommending the measures to restore confidence and stability’ in the international financial system.

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