BBC | 22 October 2010 | 12:21 GMT
US proposals that countries set targets to reduce trade imbalances appeared to be running into opposition at the G20 meeting of leading economies. US Treasury Secretary Timothy Geithner wrote to G20 members on Friday suggesting limiting surpluses and deficits to a percentage of output. But Japan, Germany and Russia expressed opposition to what one delegate called "planned economy" thinking. The proposal is seen as mainly directed at China, which had yet to comment.
Washington has been pressing China for months – without success – to let its currency appreciate. Getting Beijing to tackle its large trade surplus would be an indirect way of forcing the yuan to rising in value.
In his letter to G20 colleagues on the opening day of a meeting of finance ministers in South Korea, Mr Geithner said countries should aim to reduce surpluses or deficits to a targeted share of gross domestic product. US officials said the target would be 4% of GDP by 2015. China’s current account surplus was 4.9% of GDP in the first half.
Japanese Finance Minister Yoshihiko Noda summed up the mood among other big exporters, including Germany, saying Mr Geithner’s proposal was "not realistic". Australian Treasury Secretary Wayne Swan said he was not sure a "one-size-fits-all" approach could work. Tensions over exchange rates are like to dominate the meeting, being held ahead of a summit by heads of state next month.
BBC | 23 October 2010 | 11:29 GMT
Finance ministers from the G20 leading economies have agreed reforms of the International Monetary Fund, giving major developing nations more of a say. At a meeting in South Korea, they agreed a shift of about 6% of the votes in the IMF towards some of the fast-growing developing countries.
Those nations will also have more seats on the IMF’s Board, while Western Europe will lose two seats. But the US will retain the veto it has over key decisions. Such decisions require an 85% vote – Washington holds 17% under the IMF’s weighted voting system.
During the talks in the South Korean city of Gyeongji, the ministers also agreed to move towards more market-determined currency systems. The pressure has been on China to end its policy of holding the yuan down to maintain its competitiveness. There was, however, no timetable for change, so Beijing has kept to its long-held position that it will reform its currency policy, but gradually.
BBC News | Friday, 25 June 2010 | 12:36 GMT
Europe must focus on growth as well as cutting spending to reduce national deficits, US Treasury Secretary Timothy Geithner has told the BBC. Speaking in Washington ahead of G8 and G20 meetings this weekend in Canada, Mr Geithner said that world leaders must concentrate on the "paramount" challenges of growth and confidence. He added the world could not rely as much on the US as it has in the past. The European Union says securing growth "remains a priority". The Group of Eight and Group of 20 rich and developing nations are assembling on Friday for three days of talks. The leaders of the G8 countries – Canada, France, Germany, Italy, Japan, Russia, the UK and the US – are meeting in Muskoka, Ontario on Friday and Saturday to discuss help for poor countries. Later on Saturday, in Toronto, the G20 will open talks on how best to emerge from the worst financial crisis since the Great Depression, and will conclude the summit on Sunday.
Many European governments, including the UK, have implemented severe austerity measures in recent weeks in order to cut debt levels. UK Prime Minister David Cameron, who has arrived in Canada along with other leaders, said in an article for the Globe and Mail newspaper: "No-one can doubt the biggest promise we have to deliver: fixing the global economy." "I believe we must each start by setting out plans for getting our national finances under control," he added. Herman van Rompuy, the president of the European Council, said that the EU’s key words this weekend would be "growth, confidence and medium term". "The restoring of confidence in budgetary policies goes hand in hand with effective growth strategies," he said ahead of the meetings.
When asked if Europe faced the possibility of Japanese-style stagnation if it carries on with debt reduction policies, Mr Geithner said "Europe has the capacity to prevent that". But he added: "Europe can make a choice to put in place the reforms and policies that will provide the possibility of stronger growth rates in the future. This
Reuters | Tue Jun 22, 2010 | 9:22pm IST
India said on Tuesday it would oppose a single global bank levy designed to insure against failing institutions, an IMF proposal backed by Germany and France, when Prime Minister Manmohan Singh attends the G20 summit in Canada. Asia’s third-largest economy, where financial institutions are tightly regulated, argues its banks are sound and what is required to prevent failures globally is stricter capital rules which New Delhi will push at the summit this week. "On the issue of bank tax, as far as India is concerned, the health of our banking system speaks for itself," Foreign Secretary Nirupama Rao said, when asked about India’s stand on the contentious levy. She said India hoped the summit would see the leaders arrive at "common principles for reforming financial markets", while Finance Secretary Ashok Chawla said India would "support all efforts at raising the benchmark on financial regulation".
The levy proposal was widely expected to be set to rest at the Toronto summit, but with Germany and France renewing their push for it, the bank tax could emerge as a sticking point among the world’s top economies. A German official on Tuesday said it was a key test if the grouping could find a common position on important matters. In a joint statement on Tuesday, Britain and the two nations said they would coordinate planned levies and were committed to the full implementation of the financial sector reforms agenda. Opposing the proposal are Japan, Brazil and Canada, which have argued their banks did not need tax-funded bailouts at the height of the financial crisis.
Reuters | Sat Jun 19, 2010 | 6:56am IST
The United States pressed China on Friday to move toward a market-based exchange rate, but Beijing said not to meddle with its management of the yuan, setting the stage for a clash at next week’s G20 summit. World leaders gathering in Toronto on June 26-27 are struggling to maintain the crisis-forged unity that has been credited with preventing another Great Depression. Now that the global economy is on the mend, divisions are beginning to show. U.S. President Barack Obama released a letter to his Group of 20 colleagues that zeroed in on prickly policy differences over China’s currency stance and debt-wary Europe’s rush to rein in bulging budget deficits.
Canadian Prime Minister Stephen Harper, who will host the meeting, urged G20 countries to halve their fiscal deficits by 2013 and stabilize debt-to-GDP ratios by 2016, according to an official, who also said China’s currency would be discussed. But China largely took the issue off the table, saying its currency, also known as the renminbi, was its own business. "The RMB is China’s currency, so I don’t think it is an issue that should be discussed internationally," Cui Tiankai, a vice foreign minister who is China’s G20 Sherpa, the official in charge of preparing for the summit, told a news briefing.
Reuters | Mon Apr 5, 2010 | 5:25pm IST
US Treasury Secretary Timothy Geithner will try to strengthen bilateral ties with India during talks in New Delhi this week, but his visit may be overshadowed by Washington’s tense relationship with China. Both the United States and India will be simultaneously pushing trade and foreign exchange agendas with China, as they discuss cooperation on infrastructure development and financial markets. Geithner on Saturday delayed an April 15 report to Congress on whether China manipulates its yuan currency, pledging to work instead with Group of 20 members – India and China included — to persuade Beijing to de-peg its yuan from the dollar. Foreign Minister S.M. Krishna will be in Beijing for talks this week on a range of issues, smoothing out trade flows and reducing non-tariff trade barriers to shrink a $16 billion trade deficit with China.
"There is one potentially big issue of common interest between the U.S. and India – the Chinese exchange rate," said Arvind Subramanian, senior fellow at the Peterson Institute for International Economics, a Washington think tank. "China’s undervalued exchange rate affects emerging market economies like India even more than it does the United States," he said. Subramanian added that India might be persuaded to support a broad-based effort aimed at currency rebalancing in a large, global forum like the G20 grouping of wealthy and big emerging economies. China has intervened in currency markets to keep the yuan steady against the dollar since July 2008 at a rate that critics say effectively provides a lucrative subsidy to Chinese exports. India maintains a floating exchange rate policy.
Reuters | Sun Apr 4, 2010 | 7:58am IST
US Treasury Secretary Timothy Geithner said on Saturday he was delaying an April 15 report on whether China manipulates its currency but pledged to press for a more flexible Chinese currency policy. The decision follows Thursday’s announcement in Beijing that Chinese President Hu Jintao will attend a nuclear security summit meeting in Washington April 12-13 and seems to be a move to keep tensions over currency in check. The Obama administration seeks broad global support for measures to curb Iran’s nuclear ambitions, making it an inconvenient time to risk inflaming the dispute over China’s currency policy. Analysts said it would have been a slap in the face to Beijing if Washington had labelled China a currency manipulator days after Hu’s visit.
Geithner said he will use upcoming meetings of the Group of 20 and a US-China economic summit in Beijing in May to try to get China to budge. "I believe these meetings are the best avenue for advancing US interests at this time," Geithner said in a statement issued at midday on the Easter holiday weekend. Treasury gave no indication when it will actually release the report. The US Business and Industry Council, a trade group, said the administration apparently would delay the release of the report until after the G20 summit meeting in June. As a result, "for three more months, more American factories will close or cut back production and more of their employees will lose their jobs" because unilateral US tariffs are needed to combat "predatory trade practices."
Bloomberg November 8, 2009 03:24 EST
Group of 20 governments split on whether to tax financial trading as part of a broader strategy to ensure the global economy’s expansion is less crisis-prone. U.K. Prime Minister Gordon Brown told a meeting of finance chiefs in St. Andrews, Scotland yesterday that such a levy could prevent excessive risk taking and fund future bank rescues, adding momentum to a debate begun by France. U.S. Treasury Secretary Timothy Geithner said a “day-by-day” tax on speculation is “not something we’re prepared to support.” The dispute over a so-called Tobin tax suggests that the unity the G-20 showed in battling the worst financial crisis since the Great Depression is unraveling as its focus intensifies on how far to rein in the banking system. The outcome may determine the strength of markets as the recovery builds as well as the scope for banks to profit from them. “The initial market reaction to talk of a Tobin tax is likely to be negative,” said Julian Jessop, a former U.K. Treasury official and now chief international economist at Capital Economics Ltd. in London. A day after U.S. data showed the unemployment rate rose more than economists forecast to a 26-year high, the G-20 also agreed to keep stimulating their economies until recoveries take hold. They mapped out a time plan to show how they will make growth across the world more even and less reliant on Chinese savings and U.S. domestic demand.
Tensions flared over China’s currency policy and how to fund the fight against climate change. Brown, who has resisted pushes for Tobin tax in the past, said it “cannot be acceptable” that banks enjoy the rewards of their successful trades yet leave taxpayers to pick up the cost of Continue reading
Sumeet Desai, Huw Jones | Reuters | St.Andrews, Scotland | Sat Nov 7, 2009 | 8:28pm IST
Britain threw its weight on Saturday behind proposals to impose a global levy on banks to fund future bailouts and called on the G20 to work toward a $100 billion deal to meet the cost of climate change. A draft end-of-meeting statement from the group of rich and developing nations obtained by Reuters said the economy had improved but cautioned recovery was still dependent on the official support given to it since the financial crisis erupted last year. Policymakers also committed to a detailed timetable to launch a mutual-assessment process of their economies that could see countries set out national and regional policy frameworks by the end of January 2010. “To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured,” according to the draft, read to Reuters by a delegation source. It also warned that high unemployment remained a major concern.
British Prime Minister Gordon Brown urged the third meeting of the group’s finance ministers and central bankers this year — being held in St Andrews, Scotland — to consider the bank bailout fund urgently. France and Germany for some time have been in favour of looking at a levy but London with its huge financial centre has always resisted. Brown’s Labour government, however, is trailing in opinion polls before an election expected in May and footing a multi-billion dollar bill for bailing out the banks at a time of huge public anger against bankers for their role in the crisis. “We should discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society,” Brown said. Continue reading
Reuters | ST ANDREWS, Scotland | Sat Nov 7, 2009 | 9:06pm IST
Global economic conditions have improved but are still uneven and dependent on policy support, according to a draft of the G20 finance ministers’ and central bankers’ end-of-meeting communique. Policymakers also committed to a detailed timetable to launch mutual assessment of their economies that could see countries set out national and regional policy frameworks by the end of January 2010. “Economic and financial conditions have improved following our coordinated response to the crisis. However, recovery is uneven and remains dependent on policy support,” the draft, read out to Reuters by a delegation source, said. “To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured,” the statement said, warning that high unemployment remained a major concern. The policymakers also agreed that the challenge ahead will be the transition from crisis response to stronger and more sustainable growth as the global economy slowly emerges from the worst downturn since the 1930s. To that effect, the G20, which was proclaimed as the world’s new economic governing council in September at a summit in Pittsburgh, agreed to start a new consultative process to see if countries’ economic plans “would collectively deliver our agreed objectives”. The World Bank and International Monetary Fund will be involved in assessments. Countries will set national and regional policy frameworks by the end of January 2010 and then conduct an initial mutual assessment in April 2010, the draft said. Policy options would then be developed for leaders to consider in June 2010 with more specific recommendations to be made for November 2010.
23/10/2009 | 11:19pm 5:49pm GMT | nvs
Beating all forecasts of several analysts the UK’s GDP contracted again in 3rd quarter between July and September by 0.4% according to official figures. This figure may go up or down latter as this is only the first estimate for the quarter. Already Britain has been under recession for last 5 quarters. This is the 6th consecutive quarter that Britain is under recession. The decline in services sector has contributed large to this recession as the distribution, catering and hotels sector performed badly. The UK economy is said to be largely dependent on services sector. Absence of growth in retail sales in September and 2.5% decline in industrial output in August also contributed their share to the recession. Actually the Office of National Continue reading
Bangkok Post | 26/09/2009 at 03:34 AM
Pittsburgh, Pennsylvania – Officially crowned the world’s top economic forum, the G20 summit will crack down on banker bonuses and urge governments to keep pumping out stimulus money, Prime Minister Abhisit Vejjajiva and other world leaders vowed on Friday. The meeting in Pittsburgh was overshadowed by a dramatic announcement from host US President Barack Obama, French President Nicolas Sarkozy and British Prime Minister Gordon Brown that Iran had a second nuclear enrichment plant. As other world leaders scrambled to respond, the summit of the Group of 20 developed and developing nations ploughed on with discussions to ensure there will be no repeat of last year’s financial meltdown. British Prime Minister Gordon Brown said leaders would agree it was too early for so-called “exit strategies” for the trillions of dollars in stimulus thrown in to support key sectors of the global economy. “We will also agree it’s absolutely essential as we move to prepare a growth plan where every member of the G20 contributes to how we can meet common and shared objectives.” Chinese President Hu Jintao said the recovery was not yet solid and called for stepped-up efforts by developed and emerging economies. Although financial markets were moving towards stability, “we are soberly aware, however, that the foundation of an economic rebound is not yet solid, with many uncertainties remaining,” he told counterparts. Continue reading
BBC NEWS | 2009/09/26 02:08:28 GMT
What is the G20?
- Set up after the Asian financial crisis in 1999 as a forum for finance ministers and central bankers
- First G20 leaders summit in 2008 to discuss response to economic crisis
- Members are: Argentina, Australia, Brazil, Canada, China, EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK, and USA
- Joined by Spain, Netherlands, International Monetary Fund and World Trade Organisation The world’s leading nations have agreed “tough new regulations” to prevent another global financial crisis, US President Barack Obama has said.
Tough Regulations relate to the amount of money banks have to hold in reserve and to excessive pay for bankers. Speaking at the end of a two-day G20 summit, Mr. Obama also outlined plans to give emerging economies a greater say in the global economy. The G20 will effectively replace the G8 group of developed economies. Global leaders also announced a deal to shift the balance of voting in the International Monetary Fund (IMF) towards growing nations such as China at the summit the US city if Pittsburgh.
“We have taken bold and concerted action to forge a new framework for strong, sustainable and balanced growth,” said US President Barack Obama. “We have agreed tough new financial regulations to ensure that the reckless few can no longer be allowed to put the global financial system at risk.” He said that leading nations would now be allowed to assess each others’ economic policies. Mr. Obama added that the leaders had agreed rules to ensure that executive pay would be linked to long term financial performance. Many have criticised excessive bonuses as encouraging the kind of short term risk-taking that contributed to the financial crisis. Despite Mr. Obama’s declaration, the G20 fell short of agreeing specific rules on the capital reserves that banks need to hold. “We commit to developing by end-2010 internationally agreed rules to Continue reading
BBC NEWS | 2009/09/25 17:35:29 GMT
The G20 group of leading and emerging economies is to take on a new role as a permanent body coordinating the world economy, a White House statement said. It will take on the role previously carried out by the developed powerhouses of the G8 group. The G20 is meeting in the US city of Pittsburgh for a two-day summit. EU officials also announced a deal to shift the balance of voting in the International Monetary Fund (IMF) towards growing nations such as China. But there will be no formal announcement that the G20 will replace the G8 until 2011, said the BBC’s economics editor Stephanie Flanders. BBC business editor Robert Peston said that the rich nations of North America and Europe formally acknowledging that they no longer have a monopoly of wisdom on what’s good for the global economy would be the most important thing to come out of this summit. The IMF has 186 member-states. It lends money to countries that are facing problems, but in return economic changes have to be made by those countries. Currently, China wields 3.7% of IMF votes compared with France’s 4.9%, although the Chinese economy is now 50% larger than that of France.
The IMF has been criticised in the past as being a group of developed countries trying to lay down the law to struggling, developing countries, which is why the decision to give growing nations more votes is important. “If you talk to the Chinese or talk to anyone from emerging markets they say the IMF doesn’t have Continue reading
Reuters | Tue Sep 22, 2009 1:49pm EDT | Kevin Drawbaugh and Huw Jones
WASHINGTON/LONDON (Reuters) – World leaders will talk tough about tighter financial regulation at the Group of 20 summit in Pittsburgh this week, but concrete reforms are likely to remain a distant prospect. High on the agenda for President Barack Obama and other leaders will be proposals for restraining banker pay and making banks patch up their balance sheets to help prevent a repeat of the near meltdown of the financial system. G20 leaders will try to thrash out new ways to control over-the-counter derivatives markets, blamed for amplifying the global financial crisis, and to increase oversight of hedge funds, credit rating agencies and debt securitization. Outlines for reform could emerge from the summit. French President Nicolas Sarkozy has dropped his calls for fixed limits on banker bonuses and the United States has stressed it sees the need to discourage incentives for risk-takers.
But the G20 has no law-making power and any real changes will be left to national authorities. “G20s don’t make the detailed decisions … But they can create the conditions” for reforms, said EU Ambassador to the United States John Bruton in an interview. Those conditions, analysts said, have become less conducive to Continue reading