G-20 moves on regulation, ducks other key issues

G-20.jpgThe blog has been reading the G-20 communiqué, and various news reports, to understand whether the London summit answered the 5 key questions it raised in advance of the meeting.
Reuters provides a good summary of the outcome in terms of 3 blog questions:
Global trade. “The Summit ‘reaffirmed’ commitment from previous summit last year to refrain from raising new barriers to investment and trade. In practice, however, many of the G20 countries have adopted protectionist measures since the Washington summit in November to defend domestic companies.” On the positive side, the Summit also provided $250bn to support new credit lines for international trade.
Blog conclusion: more talk than action.
Fiscal stimulus. “The United States, Britain and Japan had been strong proponents of concerted action around the world to pump more government funds into stimulus packages; France and Germany led calls to hold off, preferring to wait for results from funds already committed. The Summit set no obligation for further fiscal measures.”
Blog conclusion: talk, but no new action.
Regulation. “Clear Summit commitment to extend regulation and oversight to all systemically important financial institutions, instruments and markets. Credit rating agencies will also be covered.”
Blog conclusion: clear action plan.
The summit communiqué covers another question:
Role of Governments: Leaders have “committed ourselves to work together with urgency and determination to translate these words into action. We agreed to meet again before the end of this year to review progress on our commitments.”
Blog conclusion: much talk, no clear action plan.
Plan B: The final question, of a contingency plan in case the global economy does not begin to recover, seems not to have been addressed.
Blog conclusion: No sign of a ‘Plan B’ being developed.

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