Leaders temper G20 ambitions
By FT reporters
Published: November 14 2008 19:38 | Last updated: November 15 2008 00:14
World leaders played down expectations of dramatic breakthroughs at the start of this weekend’s Group of 20 summit on the economic crisis on Friday, conceding that the political transition in the US made big decisions unlikely.
However, European leaders kept up their drive for a timetable to reform global finance, as figures showed that the eurozone had fallen into recession for the first time since the birth of the single currency.
The Bush administration continued to resist a lurch towards regulation but conceded that there could be discussions on subjects such as hedge funds and derivative markets that it has blocked in the past.
“Everyone agrees we need to look at these things,” said Tony Fratto, a White House spokesman. But he added: “We don’t want to be chasing bogeymen.” The Barack Obama team kept its distance from the talks, even as its representatives met with visiting delegations.
The G20 was expected to pledge to support world growth, without promising any co-ordinated fiscal stimulus; agree to principles for financial regulation; lay out an action plan and commission working groups to report back on issues including regulation of securitised markets, accounting standards, credit ratings and pay schemes in the financial sector.
Support grew for a “college of supervisors” from different nations to monitor global banks. Leaders will review the International Monetary Fund and its resources, with Japan offering an extra $100bn, and recommit to free trade. They appeared set to reconvene in the spring.
While China and other emerging nations at the summit generally kept a low profile, their presence marked a historic recognition that industrialised nations could no longer dictate the rules of global finance.
“This summit is not going to be a second Bretton Woods,” a European diplomat said, invoking a phrased used by British prime minister Gordon Brown and Mr Sarkozy. “It is the beginning of a process.”
Hank Paulson, Treasury secretary, indicated that the US would accept some criticism. “We have in many ways humiliated ourselves as a nation with some of the problems that have taken place here.” But he said the US would not accept sole responsibility for the crisis.
Reporting by Krishna Guha, Daniel Dombey and George Parker in Washington; Ralph Atkins in Frankfurt, Ben Hall in Paris and Chris Bryant in Berlin