Thursday, 2 April 2009

G20 Leaders Announce Agreement on Global Reform

The most significant parts of the agreement comprises 6 broad principles that each of the 20 countries signed up to:

* Bankers' pay and bonuses will be subject to stricter controls
* A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders and provide an early warning mechanism for the financial system
* There will be greater regulation of hedge funds and credit ratings agencies
* A common approach to cleaning up banks' toxic assets has been agreed
* The world's poorest countries will receive $100bn extra aid
* G20 countries are already implementing the biggest economic stimulus "the world has ever seen" - an injection of $5tn by the end of next year.

In particular, it strikes me as noteworthy that the group agreed to set aside more money for International Development aid - basically, support for the world's poorest nations - than anyone had expected.

In addition, tougher regulations frameworks were agreed for financial sector that will hopefully help to prevent such crises in the future.

I feel extremely grateful for the presence of the protestors during this event - without them there many people back home in the US might have mistaken this agreement to put a sharp curb on executive compensation, restrict the financial markets and redistribute wealth from the world's richest countries to it's poorest countries for an extremely progressive approach. Fortunately, the protesters were there to remind us that the world's leaders failed to abolish capitalism or put an end to money, so we can now see that these proposals are middle of the road pragmatic solutions.

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