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Loading...International Financial Reform: G-20 Commitments (part 2) — Talk or Action?
I’m still on the fence.
The recent G-20 agreements were either historic international commitments that will positively transform world financial systems in the 21st century – or they are words on paper like the old Soviet constitution that sound meaningful, but have no enforcement.
The media has mostly focused on the recession responses and reported high marks for cooperation, pledging aid to trade, and third-world support.
Important to be sure, but for the long run and even greater impact, the leaders of the most powerful nations including China, Russia, the United Kingdom, Japan, Germany, France and United States declared their intent to impose transparency, oversight and responsibility on the bulk of the world’s financial institutions. That is worth watching.
President Barack Obama summarized,
“we agreed to increased transparency and capital protections for financial institutions. We’re extending supervision to all systemically important institutions, markets and products, including hedge funds. We’ll identify jurisdictions that fail to cooperate, including tax havens, and take action to defend our financial system.” See transcript or Youtube Video of President Obama’s press conference at the end of the London summit.
While the language is general, the effects could be profound. Private transactions not subject to oversight are largely responsible for the current financial crisis and the U.S. alone estimates that 100 billion dollars in legitimate tax revenue is lost each year to illegal tax shelters and secret off-shore accounts.
The G-20 statement boasts: “The time of banking secrecy is over.”
However, the G-20 organization itself does not have governmental authority to impose financial rules. Instead, it has created a blueprint for each of the member nations to take home and make into law. (Read the documents). This will require different legislative processes in different parts of the world, just as it will require enactment by the U.S. Congress to become law in the United States.
And there’s the rub. Despite the fact that the top leaders from China’s Hu Jintao, Russia’s Dmitry Medvedev and our own Barack Obama embraced the vision of reform, we wont know the practical outcome for some time.
In the U.S., Barack Obama has strong Democratic majorities in the House and Senate, although Republican filibuster could require sixty votes to enact legislation where the Democrats have only 58 (without Franken). Right now, the pro-regulation forces have the upper hand. Deregulation is blamed rightly and wrongly for allowing the financial crisis. The usual lobbying power of the financial industry is mitigated by the great anger against financial irresponsibility.
Don’t underestimate the opposition however. “Between 1998 until 2002 the OECD [Organization of Economic Cooperation and Development] declared war on tax havens, but nothing much ever came of it because the tax havens effectively lobbied and got the OECD to back down,” Marty Sullivan, international tax expert, told the BBC.
I reported last month that Swiss Banks were facing aggressive pressure, again because of losses in the current financial crisis, to comply with international banking regulations against tax evasion and hiding of funds. This week the G-20 effectively listed 45 countries for possible sanctions. Of those, 40 have agreed to comply, but have not yet implemented rules. Only Costa Rica, Malaysia, Philippines and Uruguay have refused to sign up altogether.
Among world leaders, President Obama, German President Andrea Merkel, and most vocally, French President Nicolas Sarkozy are undoubtedly intent on financial reform. (Merkel and Sarkozy even showed a little “irrational exuberance” of their own, calling for a global financial regulator — see part 1).
International cooperation moves slowly, but propelled by the recent financial crisis, leading nations are moving in the right direction. If the public clamor for justice continues in the right direction, significant improvements in the integrity of finance at home and abroad will be the result. This will be a great test of leadership for President Obama, Secretary Geithner and the U.S. congress. If they enact domestic financial reform, our leadership by example can help put the world on a more responsible path.
Read more: G-20, international, mekel, politics, president obama, Sarkozy
Marc Seltzer © 1999
Disclaimer: The views expressed above are solely those of the author and may
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They are so cute,glad they are all safe and happy, and the mummy dog looks like my Angel!
Millisa, are we watching the same video? The dog obviously was excited at first to do what he was asked…
Awesome!!! Thank you! :-))
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16 comments
+ add your ownOh why don't we just give everybody access to all the paper or electronic money they want? There's nothing to back it anyway and it would take control out of the hands of the status quo.People would figure out that having access to all the money they want wouldn't mean you could buy anything you wanted because those stuck in jobs they hated, would quit and find more meaningful things to do with their lives. It doesn't mean people would stop working, they'd figure out what really needed to be done and focus on that.I think we've all made the assumption that the only way to get people to 'work' is to pay them, yet look what happens when a desaster hits. People turn out in droves to help.Seems money has been used as a means of control, reward and punishment. If it were not a relavent facter in peoples lives I think we'd be a lot happier, healthier and less dishonest.And a lot less wasteful since nobody would have to sell off the trees on their woodlots to pay property taxes.Think about it. Why should just a few be allowed to control the worlds money supply? Can't you just hear all the spittin' and sputterin' going on as the control mongers spin their wheels trying to convince us why this can't be allowed.And why this could not work, bla, bla, bla.Political will,thinking outside the old ways, and being bold enough to actually reclaim your personal power is really what's at stake.How would we do this? I don't know, but I bet if the idea is out there, we'll think of something.
BS...L ike Obama's transparency of his administration? Bombing Pakistan the 3rd day in office? Was that approved by Congress? The BS with AIG and all thisbankingissue that's already occured? It's all a lie...to let us THINK they are being honest."THEY" pull the strings on all of the G20. "They" the "Illuminati"...the bankers tell the G20 what THEY want. And what that is, is control of the world's money which will become their control over us!
The GAAP and accounting methods are being deliberately and severely abused. The integrity of everyday business, especially at major corporation levels, is essentially non-existent. Whatever owners and executives can get away with is the norm. Consumers as customers must support exorbitant pricing policies. The employee as a resource is a liability. It will take more than the good intentions of G-20 politicians to change anything. The folks making the most money in our economy, domestic and global, can't help taking more and escaping scrutiny: the numbers don't mean anything anymore. We're only making more fudge.
Yaahooo... Way to go people. Talking about cause...I'm very happy to see responses that aren't distracted by reported political rhetoric.
As for this:
"The usual lobbying power of the financial industry is mitigated by the great anger against financial irresponsibility."
Not so much. Not when they are sitting in offices inside the white house. I see people putting URL's of sites that I have joined and promoted. No one has mentioned trusting someone without evidential reason. Very sound comments...OK...guess I'll just go golf.
Talking about how to prevent future financial crisis seems an odd way to solve the current one. No sensible answer has been delivered on this critical issue by the G-20. Will at least future crisis be checked? No as the task is given to supervisors that will try to overshoot in order to redress their poor record, avoiding any accountability for their blunders. What are they proposing in brief? Changing the accounting rules so that hidden banking losses are shored up in their balance sheets hoping for their evaporation in a future upswing. Markets have reacted positively just because bankers see in this trick a way to avoid exposure. They will regulate everything and yet regulation as such has not prevented banks from going bankrupt. How will they butress structured securities and derivative markets that represent 50 times US GDP? For all the precautions taken, no measure can resist a wild unwinding of positions should every player rush to the emergency door at the same time, turning it into a deadly trap. If the answer is going back to paleotlitic age, little comfort is to de derived. The only answer is to have the will to curb excesses before they become out of control, and lessons of the current crisis will be soon forgotten and shelved under the false assurances provided by red tape. No one talks about the burden to be transferred to custormers and borrowers by an artificial shrinking of credit and finance. We will foot twice the bill of bankers greed and regulators blunde
It is time for a new global currency, not the US dollar, Euro, Pound ect, but a truely global dollar, keep the name dollar, its pretty universal, so we need a new name to attach to it.
[ Global,Universal, Uniting ect ]
The usual evil direction that bankers and their cronies take us is a good argument to lobby for the creation of local (either state or city) currencies. It's been done before with great success in North Dakota
http://www.webofdebt.com/articles/state_bank_option2.php
and in the little Austrian town of Wörgl.
See http://alt-money.tribe.net/thread/70e5eb29-853d-44ca-9faa-b789d1757037
Read and be amazed!
It's been done before and should be done again, asap, if we don't get real monetary reform in the form of nationalized banking and debt-free money.
With the FED printing money as fast as they can in an attempt to devlaue the debt (who cares that it also devalues our buying power) our money is going to be worthless VERY soon.
I'm glad the discussion seems pretty well-informed. I'd add for those of you in doubt about what the bankers via their political lackeys are up to a recommendation to read "The Web Of Debt" by Ellen Brown, J.D. (www.webofdebt.com or watch "The Money Masters", "Money As Debt", or "From Freedom To Facism" on youtube. And if you think the info there is right on, help inform everybody else by commenting anywhere they seem to leave out the subject of banking and adding these references.
The situation won't change until the hundredth monkey wakes up and WE all get up and do something about it. The politicians listen to whoever either pays them large sums of money, keeps them in power or threatens to dispatch them.
I see absolutely nothing indicating that there is the political will to create a radically different economic paradigm, anchored on the welfare of people and planet and not the market. Governments are essentially providing lip service but no real change. For example, why are the Bretton Woods institutions not subject to a new truly democratic charter with one vote per country instead of the current one vote per dollar scheme? Why don't they establish the Bancor as the new currency of trading instead of the dollar, as Keynes proposed since 1944? Why are they saying that they will increase regulation by requiring traders of derivatives, futures and other toxic instruments to duly register their business instead of banning altogether these most speculative and predatory practices? Why is it that the U.S. government does not reinstate the Glass Steagall Act of 1933 that prohibited investment banks to be in commercial banking and vice versa, which was abolished by the lobbying of Rubin, Greenspan, Summers and Phil Gramm in 1999? Frankly, I do not see the political will to put governments in the driving seat of the economy, and they premeditatedly insist on making the market the centre of our lives and not democracy. Governments continue to act as agents for the owners of the world: the institutional investors. This is only going to make things much worse, and if they eventually change their ways, it will be far more difficult and maybe too late to do anything meaningful.
Thank you Charles Temm Jr. all points well put and so correct.
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