G20 Summit

From the Hoss's Mouth

The G20 summit has ended. Hoss Cents Money Magazine has reviewed the statement issued by the G20 summit leaders (which can be found here). Before The Hoss comments on the commitments contained in that statement, I would like to say it is fantastic to see the USA emerge as a RESPECTED nation. This is due to President Barack Obama and the First Lady Michelle Obama showing themselves to be real people, with real ideas and real concerns for all people.



The G20 leaders have pledged to:

• restore confidence, growth, and jobs

• repair the financial system to restore lending

• strengthen financial regulation to rebuild trust

• fund and reform G20 international financial institutions to overcome this crisis and prevent future ones

• promote global trade and investment and reject protectionism in order to underpin prosperity
  

• build an inclusive, green, and sustainable recovery

Some of the steps to be taken to achieve these lofty goals are:

• G20 to increase resources available to the IMF (International Monetary Fund) to $750 billion.

• G20 to provide a new SDR allocation of $250 billion (The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.)
  

• G20 to provide at least $100 billion of additional lending by the MDBs (Multilateral Development Bank).

• G20 to provide support for trade finance up to $250 billion.

• G20 to provide additional resources from agreed IMF gold sales for concessional finance for the poorest countries.

• G20 to constitute an additional $1.1 trillion to restore credit, growth and jobs in the world economy.

• G20 to provide over $1 trillion of additional resources for the world economy through our international financial institutions and trade finance.

The G20 Summit leaders established an action plan and issued a declaration stating they will strengthen the financial system. In particular, they made the following commitments:

• to establish a new Financial Stability Board (FSB) with a strengthened mandate as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain, and the European Commission

• that the FSB should collaborate with the IMF to provide early warning of macro-economic and financial risks and the actions needed to address them

• to reshape our regulatory systems so that G20 authorities are able to identify and take account of macro-prudential risks

The Hoss realizes that the leaders of the G20 must do more than just make commitments; they must also follow through with the required action. Many summits are held and many commitments made, but when leaders return home they do not take the necessary steps that would enable them to achieve what they have committed to do. Can you say Kyoto Accord? Let's hope the G20 leaders are truly determined to achieve all the goals contained in the G20 statement. If they do follow through with their commitments, it should lead to a worldwide economic recovery.

Stay on track,

The Hoss


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