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business newsWhy Should I Care: G20
Like shooting finance in a barrel.
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Most people watching international news coverage of the G20 Summit in London came away with 2 drastically different stories. The first was the tragic death of protester Ian Tomlinson, which is currently under investigation. The other was the confirmation that President Barack Obama is an international superstar of a magnitude unseen since the Backstreet Boys, circa 2000.
But the summit also involved serious discussions of a number of urgent financial issues.
For those of you not completely familiar with the G20, don’t be too confused when you notice there are only 19 member nations. The twentieth member is the European Union - a seat occupied by the EU's rotating leadership.
As for the actual summit, you won’t find a larger group of prominent economic leaders anywhere - not even at Brangelina's house parties. Other than heads of state, the group also includes finance ministers and representatives from the International Monetary Fund, World Bank, and the European Central Bank. So London was a better location for this convention than, say, Vegas.
While a host of studies and discussions took place, the summit focused primarily on 2 working groups. The first, entitled Enhancing Sound Regulation and Strengthening Transparency, suggested how greater regulation could prevent instability in the financial system. The primary focus was macro, taking a systemic approach to financial regulation.
The second group, Reinforcing International Cooperation and Promoting Integrity in Financial Markets, looked to establish supervisory colleges for all major financial institutions, particularly hedge funds. After Madoff and Bear Stearns (JPM) alone, this more than makes sense.
As for Obama's first international summit as president: The president hailed the G20 as “a turning point in our pursuit of global economic recovery.” As a group, the 20 pledged over $1 trillion to finance global institutions, while declaring a major crackdown on tax havens and hedge funds.
While increased regulations may make some people nervous, the overall message of the summit was considerably anti-protectionist, opening up the global economy to entrepreneurs. There may not have been consensus on every issue, but the summit looked like an important step in helping the international economy.
And hey, our president is bigger than Elvis, which is cool.
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