G20 Summit agrees to global oversight of banks!!!

[Murrican]

http://www.financialpost.com/news/story.html?id=964039

Summit agrees to global oversight of banks

Eoin Callan, National Post

Saturday, November 15, 2008

WASHINGTON -- World leaders meeting in Washington agreed to put in place the foundations of a new global structure to oversee the banking system after one of the worst financial crises of the century brought global economic growth shuddering to a halt.

The leaders agreed an "action plan" and sixteen principles for reform, creating working groups that have 100 days to develop detailed proposals before a second summit of G20 leaders is convened.

French President Nicolas Sarkozy called the agreement "historic," praising the contribution of fellow leaders and underscoring the importance of having secured the imprimatur of both the outgoing Republican administration and incoming Democratic White House team.

A 16-point communique identified "comon principles for reform" and promised timely implementation that would "strengthen...regulatory regimes so as to avoid future crises."

The joint statement said there would be "intensified international cooperation among regulators and strengthening of international standards..

The leaders agreed that financial institutions must "bear their responsibility for the turmoil" and to create a new network of global oversight that would include an expanded Financial Stability Forum, which will have a new larger membership that includes central bankers and regulators from fast-growing economies like China and Brazil.

The FSF will work "in collaboration with" the International Monetary Fund to step up surveilance of risks in the financial system and be ready to "act swiftly to play a key role in crisis response."

[Murrican]

http://www.thestar.com/News/World/article/537847

Parliamentary Government structure in Canada allows the government to respond much more quickly than in the US. Fewer lobbyists, more party discipline means when Prime Minister or Finance Minister says something will happen, it will. Less hand-wringing and more decisiveness has allowed Canadian economy to remain out of deficit and creating jobs for all of 2008. After G20 government now says it will be willing to go into deficit temporarily to boost global demand, sustain jobs in the world, and buffer impacts of economic instability elsewhere, to avoid a world depression. In 1929-30 all governments pulled back and depression resulted; opposite approach now is expected to prevent a depression.

G20 prescription for economies
Ottawa ready to spend to spark economy

Harper commits Canada to do its part, doesn't rule out future bailout plan for auto industry

Nov 16, 2008 04:30 AM

Tim Harper
Les Whittington
Staff Reporters

WASHINGTON–The Conservative government is going to open its wallet to help boost the Canadian economy as part of a global effort to stave off a deepening recession, Prime Minister Stephen Harper says.

After an emergency meeting with other world leaders yesterday, Harper said his government is setting aside its aversion to budgetary pump-priming – and deficit spending – so Canada can do its part to improve worldwide business conditions.

"We will do what we have to, to contribute to boosting global demand," the Prime Minister told reporters after he and other Group of 20 leaders agreed on collective action to stimulate the economy.

And Finance Minister Jim Flaherty said Canadians could see new spending by Ottawa to spark economic growth as early as his mini-budget scheduled for the last week of November. Flaherty also told the Toronto Star that, because of the worsening economy, he may have to move his annual budget announcement earlier than the usual late-February or March timetable.

In a press conference, Harper said events are forcing his government to abandon its dislike of interventionist government spending. He praised China for its recent decision to inject $567 billion (U.S.) into its economy. "Other countries have recently taken actions and we'll obviously be looking at additional actions ourselves," he added.

During the recent federal election campaign, the Conservatives said they would never run a budget deficit. But the government now acknowledges that, with the world economy falling so much faster and farther than anyone expected, a budget shortfall cannot be ruled out this year and next.

"This is not business as usual these days," Flaherty said in an interview.

Leaders from the G20, which brings together industrialized nations such as Canada and the United States with newly developed economies like China and India, reached agreement yesterday to work together in hopes of combating the gathering global recession.