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G-20 & IMF as the Global Federal Reserve’s Brokers/Bankers

G-20 & IMF's as Global Brokers/Bankers

G-20 & IMF's as the Global Federal Reserve's Brokers/Bankers

G-20 gives $1 trillion to fight global crisis
By JANE WARDELL, AP Business Writer Jane Wardell, Ap Business Writer 21 mins ago
LONDON – World leaders pledged $1.1 trillion in loans and guarantees to struggling countries and agreed Thursday to crack down on tax havens and hedge funds — but failed to reach sweeping accord on more stimulus spending to attack the global economic decline.

At the end of a highly anticipated one-day gathering, leaders of the Group of 20 nations said they would upgrade an existing financial forum to serve as an early warning monitor to flag problems in the global financial system.

They did not, however, satisfy U.S. and British calls for new stimulus measures. Nor did European politicians get their goal of a global financial superregulator.

The leaders did bridge several gaps between the United States and some European nations over how far to regulate the market and how to curb the excesses that sparked the global economic crisis.

President Barack Obama, in his first major venture into international diplomacy, failed to get U.S. trading partners to spend more money on job-creating stimulus programs, as the U.S. and Britain have done. The proposal was opposed strongly by France and Germany.

However, it had become clear long before the gathering began that there was little support for more such stimulus spending outside the U.S. and Britain.

“I think we did OK,” Obama told reporters afterward. “We have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this happening again… We have created as fundamental a reworking of resources to these international financial institutions as anything we’ve done in the last several decades.”

Obama’s words echoed comments by British Prime Minister Gordon Brown and the French and German leaders.

Thursday’s gathering was called in hopes of restoring faith in the global financial system — and in one possible gauge of success, European and U.S. markets surged ahead as the outcome of the summit came into view.

The biggest headline figure was the new money for the International Monetary Fund, which helps out governments that run into financial trouble from the crisis, and other development organizations to send credit to countries that have seen it dry up.

French President Nicolas Sarkozy, who earlier had threatened earlier to walk out if unsatisfied with the outcome, also praised Obama for helping to create consensus and persuade China to agree to publish lists of tax havens.

“There were moments of tension,” Sarkozy said. “Never would we have thought to get as big an agreement.”

German Chancellor Angela Merkel called the measures “a very, very good, almost historic compromise” that will give the world “a clear financial markets architecture.”

“For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world’s poorest,” Brown said. “This is a collective action of people around the world working at their best.”

The G-20 leaders also said that developing nations — hard-hit and long complaining of marginalization — would get a greater say in world economic affairs. They said they would renounce protectionism and pledged $250 billion in trade finance over the next two years — a key measure to help struggling developing countries.

The leaders also agreed to new rules on linking executive pay to performance, Brown said.

Despite the announcement of a global supervisory body to flag problems, Sarkozy lost his bid for a global regulatory czar that could actual enforce regulations inside U.S. and other countries.

Obama said that the comprehensive deal was just the beginning, and the world’s problems “are not going to be solved in one meeting, they’re not going to be solved in two meetings.”

G-20 leaders agreed to gather again to assess progress on their commitments at the sidelines of the annual U.N. summit in New York in September.

Police were out in force for the G-20 summit Thursday, swarming the east London riverside site after demonstrations in the city’s financial district on Wednesday turned spordically violent.

Police boats patrolled the Thames river as small groups of demonstrators protested world poverty and climate change. Over 110 people were arrested over two days, police said.


IMF’s Global Bailout

IMF's Global Bailout

IMF's Global Bailout

G-20 leaders eye more IMF funds, tighter rules
By JANE WARDELL, AP Business Writer Jane Wardell, Ap Business Writer 1 hr 10 mins ago
LONDON – Global leaders made headway Thursday on tackling the world financial crisis, with new clampdowns likely on tax havens and hedge funds and more funds heading to the International Monetary Fund so it can boost loans to struggling countries.

Officials close to the negotiations said the Group of 20 nations could triple their funding for the IMF to $750 billion. The world financial body supports countries whose finances have been hard hit by the global slowdown, supporting their currency reserves and banking systems.

The officials, from a number of delegations, said the funds could include an overdraft facility worth some $250 billion for developing countries. They refused to be further identified because they were not authorized to speak to the media.

On financial regulation — a sticking point ahead of the gathering — two people close to the negotiations said that France and Germany had persuaded the Group of 20 leaders to back tougher language in the final statement on stronger rules to avoid a repeat of the current crisis.

Another official said the final deal will include proposals making sure companies more tightly link executive salaries to performance, a measure that reflects public outrage about the huge retention payments, bonuses and golden parachutes granted to banking chiefs before the sector collapsed.

Opening the summit in London’s east Docklands district, British Prime Minister Gordon Brown said there was strong unity among leaders upon the need for action.

“I believe that the text that has been circulated already reflects a very high degree of consensus and agreement between all of us,” Brown told his fellow leaders.

Britain’s Finance Secretary Stephen Timms said early discussions had been “lively,” but added that countries would agree on sanctions against countries who refuse to sign up to new rules on regulating tax havens.

“The era of banking secrecy is over,” Timms said.

As President Barack Obama and Brown joined other leaders at a working breakfast, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul’s Cathedral. Riot police took up positions as well, ringing the stock exchange.

French daredevil Alain Robert scaled Lloyds of London’s high-rise headquarters as office workers below snapped photos. Robert, dubbed the French spider-man, has scaled dozens of tall structures around the world without ropes or harnesses to draw attention to global warming. He was later led away by police.

French President Nicolas Sarkozy and German Chancellor Angela Merkel have been adamant that the G-20 meeting must take concrete steps to more closely regulate banks, hedge funds and other financial institutions.

Sarkozy had previously threatened to walk out if the summit didn’t achieve a strong statement on new financial regulations, warning that he considered action on tax havens, hedge funds and ratings agencies as the absolute minimum the negotiations must resolve.

Sarkozy and Merkel want the G-20 to publish a blacklist of tax havens and announce sanctions at the end of Thursday’s meeting.

The British official said the boost to the IMF would include significant pledges from China, and in return there would be increasing efforts to give China and other emerging countries greater clout on the IMF.

Obama has acknowledged that U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying “we can only meet this challenge together.”

European leaders have balked at moving beyond spending measures already announced, arguing that their more generous welfare systems mean their spending levels will rise anyway as more people get benefits such as unemployment insurance.

As leaders met in the Docklands, a former shipping area on the Thames river that was redeveloped as an international business center, protesters began a second day of demonstrations. Security was tight at the summit venue; hundreds of police manned barriers and checkpoints around the security perimeter.

Near St. Paul’s Cathedral in the financial district, protesters played a giant Monopoly game.

“The question is of course who has got the monopoly? It is fairly obvious the G20 are the global financial elite,” said protester Clare Smith, 27. “Meanwhile the poor are getting poorer.”

More than 100 people have been arrested.


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