Bold Actions Of G20 London Summit

As I recognize it, there remains a debate between those who believe that the current economic environment compels a dramatic rethink of the foundations, systems and structures upon which the global economy operates, and those who believe that such sweeping reforms are both unnecessary and politically impossible.

In short, there are those who seek to begin the process of crafting a ‘new Bretton Woods’ and those who seek to ban the use of that phrase altogether.

In my earlier post, I wrote(scribbled) about "the global financial sector is in need of structural reform". I believe that the current economic crisis provides an opportunity to reshape the global financial system in ways that more accurately reflect the global nature and risks inherent in 21st-century banking, finance and capital flows.

This G20 gathering represents a true ‘free market’ where there is competition for ideas, creativity and leadership. It provides the perfect opportunity for a 21st-century successor to the intellectual and creative leadership of John Maynard Keynes to emerge.
To be successful, it is imperative that the United States play an active leadership role at the London Summit. The US has a unique role. The failure of the US to assume a leadership role, especially with the presence of President Obama, would undoubtedly be seen as an
opportunity missed.

The most innovative and bold structural proposals have come from Europe, where a recent report by the High Level Group on Financial Supervision in the EU, under the direction of Jacques de Larosière, contains some very worthy, realistic and detailed recommendations.
Unofficial groups, such as the G30 Financial Reform Working Group chaired by Paul Volcker, have similarly issued reports which I urge summit participants to review carefully and consider seriously.
The proposal is important because it seeks to address the systemic nature of risk, which underpins the existing financial system, and also because of its inherent inconsistency.
Given the magnitude and scale of the issues now confronting summit participants, those officials tasked with its preparation should not feel bound to adhere strictl to the agenda and working groups created four months ago.
Now is not the time for caution, but rather the time for bold assertion of leadership, ideally by the United States, but hopefully with the collective support of the global community.

G7 and G20 countries

G7 Countries

The G7 was an informal gathering of heads of state and governments of the world's most advanced economies (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States).

In the early stages, members of the G7 were accompanied at meetings by their foreign and finance ministers. In 1998, the British Presidency decided to separate the ministerial meetings from the original summit in order to keep the original concept of a small, informal gathering. In the same year, Russia joined what then became the G8. Since 2005, the G8 has been holding dialogues with the major emerging economies of Brazil, China, India, Mexico and South Africa.

G8 finance ministers meet once a year before the actual summit. However, finance ministers also meet in general three more times (early in the year, and at the margin of the spring and annual meetings of the international financial institutions), but in a G7 (instead of a G8) framework. . Since the introduction of the euro, the European Central Bank (ECB) and the President of the Eurogroup also attend. (Courtesy:Wikipedia)

The G7/8 deals with such issues as: global economic outlook and macroeconomic management, international trade, energy, climate change, and relations with developing countries.

G20 Countries

The G20 (Group of 20) is a group representing 19 of the world's largest economies plus the European Union that are strategically important and influential in the world economy. The G20 was formed as a new forum for cooperation and consultation on matters pertaining to the International Financial System (IFS).

The membership of the G20 comprises the finance ministers and central bank governors of the G7, 12 other key countries, and the European Union Presidency (if not a G7 member); the European Central Bank; the Managing Director of the International Monetary Fund; the Chairman of the IMFC; the President of the World Bank; and the Chairman of the Development Committee.

The G20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.

The members of the G20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America. The European Union is also a member, represented by the rotating Council Presidency and the European Central Bank.