G20 Bankers Saturday News

G20 pledges to implement IMF reforms, fight protectionism
IANS 5 September 2009, 11:04pm IST

LONDON: Finance ministers of the Group of 20 (G20) countries on Saturday pledged to give India and other emerging economies a greater voice in
the running of the International Monetary Fund (IMF) and other global financial institutions.

In their final communiqué issued here after Sep 4-5 meetings of the group representing 80 percent of world GDP, the finance ministers pledged to implement reforms to the World Bank by Spring 2010 and the next IMF quota review by January 2011.

They also welcomed the swift implementation of the $250 billion trade finance initiative aimed at keeping promoting global trade, declared they fight all forms of protectionism and pledged to reach "an ambitious and balanced conclusion" to the Doha Development Round.

"We recognise that the IMF should remain a quota-based organisation; and as part of the reforms, the voice and representation of emerging and developing economies, including the poorest, must be significantly increased to reflect changes in the world economy," the communiqué said.

The finance ministers said they looked forward to "substantial progress" at the Sep 24-25 summit of G20 leaders in Pittsburgh, US.

Following demands by the finance ministers of Brazil, Russia, India and China (BRIC) Friday, the wider group of G20 finance ministers also pledged to move to an "open, transparent and merit-based" selection of the management of international financial institutions such as the IMF and World Bank.

The IMF and World Bank so far have been led by rich nations.

UK PM urges G20 to maintain fiscal stimulus
AFP 5 September 2009, 10:47am IST

LONDON: British Prime Minister Gordon Brown will warn on Saturday against withdrawing the massive stimulus measures launched to tackle the global credit crisis, saying it would be a "serious mistake".

Brown will urge G20 finance ministers meeting in London not to be too hasty to end the emergency measures that saw huge amounts of money pumped into economies after the credit crunch, as they seek a way out of the crisis.

"To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgement be a serious mistake," he will say, according to pre-released extracts of his speech.

"On the contrary, with more than half of the five-trillion-dollar fiscal expansion committed to, yet to be spent, I believe the prudent course is for G20 countries to deliver fiscal plans and stimulus packages they have put in place and make sure they are implemented in full both this year and next."

He adds: "Given the risks we face, this is not the time for economic complacency or over-confidence. The stakes are simply too high to get these judgements wrong."

Brown's cautious tone echoed that of Swedish finance minister Anders Borg, who said at the meeting Friday that the world was still "standing in the ashes" of economic catastrophe.

"When you've just come out of the ashes, it's not time to call off the fire department," he added.

The prime minister will also renew his call for new rules on pay for bankers, emphasising unity between Britain, France and Germany on the issue -- despite signs of a split on the extent to which bonuses should be curbed.

"As (French) President (Nicolas) Sarkozy, (German) Chancellor (Angela) Merkel and I have said this week, all G20 countries should develop together and implement consistent binding rules on bankers' pay -- with sanctions at national level for banks that do not play by them," he will say.

"We should agree on the sanctions we will take against jurisdictions which fail to meet global standards and commit to implement these actions from March next year... We must act on our pledge to end the era of banking secrecy."

LONDON: Finance ministers of the Group of 20 (G20) countries on
Saturday pledged to give India and other emerging economies a greater
voice??????

India a greater voice??? That seem veryyyyyyyyyyy ODD but now I see why...."FOLLOW THE MONEY"...money talks:

India to invest $10bn in IMF, says Pranab
IANS 5 September 2009, 12:24am IST

LONDON: India is set to invest up to $10 billion in the International Monetary Fund (IMF) as part of a major thrust to wrest a greater say in the running of international financial institutions, finance minister Pranab Mukherjee announced on Friday.

"India has decided to invest up to $10 billion of its reserves in notes issued by the International Monetary Fund," Mukherjee said after a meeting of the finance ministers of Brazil, Russia, India and China (BRIC) in London. The Indian pledge is part of a total of $80 billion that the four BRIC countries will invest into the IMF in order to replenish its fund aimed at helping out countries that are struggling in the current financial crisis.

China will account for $50 billion of this amount, and the rest will be borne by India, Russia and Brazil. In return, the BRIC countries want a greater say in the running of the IMF and other international financial institutions such as the World Bank, including a larger share of quotas and voting, said Brazil's finance minister Guido Mantega.

Part of the BRIC meeting was joined by US treasury secretary Timothy Geithner in a move that Mukherjee described as "an acknowledgement of the group's emergence as a key voice in global economic and financial issues".

G20 to stick with stimulus, little move on bank pay

By Glenn Somerville and Toni Vorobyova Glenn Somerville And Toni Vorobyova – Sat Sep 5, 7:01 am ET

LONDON (Reuters) – G20 finance leaders pledged on Saturday to keep economic life-support packages in place until a recovery is firmly secured, but reached no deal on putting limits on bankers' pay.

Finance ministers and central bankers meeting in London agreed fiscal and monetary policy would stay "expansionary" until recovery from the worst financial crisis since World War II was certain, a draft of their joint statement seen by Reuters showed.

The global economic outlook is certainly a lot better since leaders last meeting on the economic crisis in April, but policymakers are worried about derailing that recovery by pulling the plug too soon.

"We will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies consistent with price stability and long-term fiscal sustainability until a recovery is firmly secured," the draft said.

With politicians looking for someone to blame for the recession, the rhetoric leading up to the meeting had been directed firmly at bankers and their lavish multi-million dollar bonuses.

But the ministers could not agree on putting an actual cap on bonuses as had been advocated by some countries and leading charities.

Instead, they agreed to create a global structure for imposing tighter controls on pay at financial institutions to discourage bankers from making the kind of risky bets that started the crisis back in August 2007.

These included deferring bonus payments over time and subjecting them to "clawback" in case things went sour. The compromise was that the Financial Stability Board, a global regulatory council headed by Bank of Italy chief Mario Draghi, would study caps and the whole issue of pay further.

"Pay and bonuses cannot reward failure or encourage risk taking." British Prime Minister Gordon Brown told the start of the meeting. "It is offensive to the public whose taxpayers' money in different ways has helped many banks from collapsing and is now underpinning their recovery."

CHANGING WORLD ORDER

The draft statement showed agreement that emerging nations like India and China should have a greater say in the running of the International Monetary Fund and World Bank but did not offer up any formula of how this should be achieved.

It said only that their voice in global economic policymaking would grow "significantly" and that it expected "substantial progress" to be made on the issue at a summit of world leaders in Pittsburgh later this month.

The BRIC group of leading emerging powers -- India, China, Russia and Brazil -- had laid out on Friday concrete targets for how much movement they wanted in IMF and World Bank quotas.

Nor was there much clarity yet on a U.S. proposal for increasing the capital that banks hold in order to prevent a rerun of the crisis that led to the collapse of some of the world's biggest banks.

While G20 countries agree that banks need more money set aside in reserves to cushion against losses, how much is needed and how that is calculated appears to be in dispute.

Washington's proposal has raised concerns that the United States is pulling back from the G20's April pledge to tackle the issue within the existing framework, known as Basel II.

French finance minister Christine Lagarde said on Friday she could not see the point of scrapping that framework, saying changes already made to it had dealt with the biggest issues.

(Writing by Sumeet Desai; editing by Keith Weir and Patrick Graham)

Will meet finance ministers from the Group of Twenty-economic Saturday in London in preparation for the summit, leaders of the group to be held in the twenty-fourth of this month in the city of Pittsburgh.

وبالرغم من اتفاق المجتمعين على السياسات التي تم اتباعها للحد من آثار الأزمة المالية العالمية في الشهور الماضية، فإن هناك بوادر خلافِ داخل المجموعة بشأن استراتيجيات ما بعد الأزمة وخصوصا فيما يتعلق بالمكافآت التي يحصل عليها المصرفيون. Despite the agreement, meeting on the policies that have been used to reduce the effects of the global financial crisis in recent months, there are signs of disagreement within the group on strategies for post-crisis, especially in respect of remuneration received by the bankers.

وتتزعم فرنسا تحركا للحد من حجم تلك المكافآت وتدعمها ألمانيا، بينما ترفض الولايات المتحدة وبريطانيا هذا الموقف. France is leading a move to reduce the size of those bonuses and supported by Germany, while refusing to Britain and the United States this position.

هذا وقد يتم الاتفاق خلال الاجتماع على تخفيض الدعم الحكومي تدريجيا للاقتصاد بعد ضخ مليارات الدولارات في الأسواق على مدار الأشهر الماضية. This has to be agreed during the meeting to gradually reduce government support for the economy after pumping billions of dollars in the market over the past months.

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