The Yale Global Online reports on the G-20 summit in the UK:
Our biggest accomplishment was agreeing that the International Monetary Fund needs substantial new funds. We talked about alternative funding vehicles, but couldn’t agree and ultimately left the details to a working group to refine by June. The discussion was difficult: Led by Indonesia, several developing nations said no country with any self-respect would take IMF funds after the humiliations experienced during the 1997-98 Asian crisis. Be that as it may, said the European Union representative, Hungary and others in Eastern Europe have no choice but to take IMF money, with little coming from their Western European partners. China registered a caveat: It would contribute to the IMF only if the voting structure changed, with more power given to the big emerging nations – a major change that could take many months…
The discussion on bank rescues was disjointed. Obama asked for patience while the US plan was tried. A few eyes rolled. A number of European leaders talked excitedly about capping executive compensation at the top civil-service payment levels. After China suggested that a mission be mounted to Beijing to study how a banking system should function, Prime Minister Gordon Brown anxiously moved on to the next item…
Brown then asked the group to focus on macroeconomic issues, pointing out that a major cause of the crisis – perhaps the most fundamental one – was massive trade imbalances between the US and China, with Americans overspending and Chinese oversaving. He asked how the world could correct its dependence on the overburdened American consumer and put more onus on the Asian consumer. Obama assured the group that he and China’s President Hu Jintao would handle this issue in their bilateral meeting later that day. Brown asked the two to report back to the G-20 with generated ideas. No report was ever made…
Part II of the article can be found here.
News report on proposed banking changes that were developed during the summit:
See also past CDT posts on the G-20 summit.
