London: Finance Ministers Meet for G20 Summit

The Group of Twenty Finance Ministers and Central Bank Governors, more commonly known as G20, has been meeting at a summit in London.

The G20, which comprises 80 percent of world trade, pledges to keep economic life-support packages in place for now.

But the ministers agreed that tighter controls need to be slapped on bankers’ pay and a louder voice should be given to emerging markets in the international institutions.

A draft of their joint statement shows agreement that fiscal and monetary policy will stay “expansionary” for as long as needed so as not to derail recovery from the worst financial crisis since World War II.  

The global economic outlook is certainly looking better, and economic policy makers don’t want to do anything that would throw that recovery off track.

The draft reads: „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.“  

G20 finance chiefs also 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 Aug. 2007.  

These controls include deferring bonus payments over time and subjecting them to „clawback“ in case things go sour.

But some members want a tighter cap.

A compromise was reached in which the Financial Stability Board, a global regulatory council headed by Bank of Italy chief Mario Draghi, will study the issue further.     

The draft also says that emerging nations like India and China should have a greater say in the running of the International Monetary Fund and World Bank.

No formula is mentioned as to how this should be accomplished, but only that their voice in global economic policymaking will grow „significantly,“ and that „substantial progress“ is expected to be made on the issue at a summit of world leaders in Pittsburgh later this month.

G20 members posed on Saturday morning, September 5th, for the obligatory family photograph.

(NTDTV)