Thread: Reshaping of world financial system outlined

Reshaping of world financial system outlined
China, Brazil, India would take a greater role, G-20 leaders say


By Glenn Kessler and Anthony Faiola

World leaders holding an emergency meeting to combat the economic crisis agreed Saturday to a far-reaching action plan that, over the next 4 1/2 months, would begin to reshape international financial institutions and reform worldwide regulatory and accounting rules.

The leaders' 11-page statement spoke of broad principles, leaving the details to be worked out by lower-level aides before another summit meeting in April, after Barack Obama assumes the presidency. But the gathering in Washington of the nearly two dozen nations — from every region of the world — reflected the new balance of power emerging in the aftermath of a financial crisis that has devastated even well-run economies, a wrenching process that British Prime Minister Gordon Brown has dubbed "the birth pangs of this new global order."

Under the plans outlined by the leaders, countries such as China, Brazil and India would gain greater roles and responsibilities as part of a restructuring of the international financial system, while European leaders won a commitment to new regulations and controls on banks, rating agencies and exotic financial securities. The leaders also agreed that a dramatic failure of market oversight in "some advanced countries" was among the root causes of the financial crisis, an implicit rebuke of the United States.

"I'm a free market person," President Bush told reporters after the summit ended, "until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression."

The Europeans got "virtually everything" they sought at the summit, French President Nicholas Sarkozy crowed afterward at a news conference. He said it had been difficult to persuade Bush to hold the summit, but the results were worth it. "America is still the No. 1 power in the world," he noted. "Is it the only one? No, it isn't."

The leaders, representing the Group of 20 economic powers, Spain, the Netherlands, the United Nations and other international organizations, met over dinner at the White House on Friday. They then continued their discussions Saturday arrayed in a square in the central hall of the 19th-century National Building Museum, beneath soaring 159-foot high ceilings.

"We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world's financial systems," the leaders declared in their communique.


The leaders agreed to set up a new regulatory body, "a college of supervisors," to examine the books of major financial institutions that operate across national borders, so regulators could begin to have a more complete picture of banks' operations. They demanded greater scrutiny of hedge funds and the completion of a clearinghouse system to help standardize and limit risk on some of the opaque and exotic financial derivatives that helped bring down Wall Street's investment banks.

Leaders also agreed to submit their countries' financial systems to regular, vigorous reviews by the International Monetary Fund — assessments that some countries, including the United States, had long resisted. And they urged new constraints on the pay schemes at financial firms that "reward excessive short-term returns or risk-taking."

Sarkozy was especially pleased by the mention of executive compensation, though the communique noted that action could be voluntary or regulatory in nature. "Have you ever seen in the Anglo-Saxon world even discussion to have rating agencies downgrade the banks where executive compensation has [encouraged] them to take too much risk? I have never seen it," he said.

Senior Bush administration officials played down Sarkozy's comments, arguing that the agreement yesterday did not signify a "pro-regulatory" shift by the administration but rather an acknowledgement that the regulatory system needed to be updated. They spoke on condition of anonymity under ground rules set by the White House.

Obama stayed away from the summit, though the White House extensively briefed one of his senior advisers on the deliberations and two of the president-elect's representatives met with 17 leaders or their top aides on the sidelines. Many sections in the communique may please Obama, but at least one pledge to which Bush agreed — a 12-month hiatus on protectionist measures — could be viewed as limiting his options.

http://www.msnbc.msn.com/id/27742573

"Leaders also agreed to submit their countries' financial systems to regular, vigorous reviews by the International Monetary Fund -- assessments that some countries, including the United States, had long resisted."

And rightly so. The elites plan for a centralized international banking system moves steadily into place as the concept of "national sovereignty" is rendered daily more powerless and depicted publically as "obsolete".

a wrenching process that British Prime Minister Gordon Brown has dubbed "the birth pangs of this new global order."

I would call it a frightening process......... and will not be at all good for US!

Yes, this is the harbinger of the new world order, but what frightens me the most is who will be in control of planet Earth society. There are too many nations out for only their own sovereignty and power over everyone else. Under GWB, American sovereignty is not a consideration and they have put this country into a state where it is beholden to the entire world.

They need to put this up to the people with a democratic national vote. They need to bring us into this process and make sure that they have our approval before our "stewarts" do anything like this.

Yes maybe we should look into making the system more fair towards the United states and a few other things. Like Fair trade for us. What is it in it for us the American people interest to go forward with something like this? Do we get a say and a damn good reason to do it???

Where does the power come from for our leaders to do this? I believe they need our ok(vote) from 2/3rds of the states to change the law to even give them the right to do this.

"The leaders' 11-page statement spoke of broad principles, leaving the details to be worked out by lower-level aides before another summit meeting in April"


I want those 11 pages in every Americans mail box. Also I want it on the news every night discussing what this and what goods and bads will it do. We deserve no less.

Originally Posted by Matthewcloseborders

Where does the power come from for our leaders to do this? I believe they need our ok(vote) from 2/3rds of the states to change the law to even give them the right to do this.

We are living in very unsettling times! They could care less what we think!

Quote,

"I'm a free market person," President Bush told reporters after the summit ended, "until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression."

Who is he directing the comment to? Nobama?

Originally Posted by roundabout

Quote,

"I'm a free market person," President Bush told reporters after the summit ended, "until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression."

Who is he directing the comment to? Nobama?

What the idiot should have said is because of my actions as president we are going into a depression greater than the great depression because that is what is happening.