CIGI Commentaries, November, 2010
The G20 agenda for financial regulatory reform is both depressingly familiar and surprisingly new, says CIGI expert in international political economy Eric Helleiner. He argues that that while a breakthrough on regulation is unlikely at this week’s Seoul Summit, the stage is set for emerging markets to make their impact on regulatory policy.
Adding development to the G20’s agenda marks a new stage in the evolution of the “premier forum” for managing the world economy, says CIGI senior fellow Gregory Chin. The proposed action plan integrates elements of the traditional Western development model with the ideas of new donors such as China and draws on the experience of Korea, the Seoul summit host.
The G20 has taken various measures to reduce systemic financial risk, including an expansion of domestic and international financial safety nets, while taking into account the moral hazard problem. Wider measures may be necessary to avert future crises, says CIGI visiting senior fellow and economist Manmohan Agarwal.
The G20 leaders will grapple in Seoul with how to deflect the risk of another downturn in the global economy. CIGI expert Daniel Schwanen suggests there is much that G20 leaders can do because national interests often coincide with the collective global interest.
Many observers believe that the International Monetary Fund faces a crisis in legitimacy and governance. On the eve of the G20 summit in Seoul on Nov. 11-12, CIGI’s executive director Thomas A. Bernes explains how the G20 leaders should act to bring about meaningful reform in the organization.
Having lost the “fellowship of the lifeboat” prevailing during the acute phase of the global financial crisis, the G20 countries are increasingly at odds on some issues and in search of legitimacy for their new institution. Differences exist in their diagnoses of the global recession, in their prescriptions for recovery and, in particular, on exchange rate policies, observes CIGI senior fellow Barry Carin. He suggests ways the G20 can become more inclusive of the needs of nations within and outside its membership.