BBC NEWS: AGREEMENT REACHED AT G20 SUMMIT

Leaders of the world’s largest economies have reached an agreement to tackle the global financial crisis with measures worth $1 trillion, including $750 billion to the IMF and $250 billion committed by the G20 to boost global trade.  Of the $750 billion going to the IMF, $250 billion of that is located in an overdraft facility, available to all members. 

In an example of the ability of countries to find common ground during hard times, the plan includes guidelines such as: 

1. Bankers’ pay and bonuses will be subject to stricter controls.
2. 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.
3. There will be greater regulation of hedge funds and credit ratings agencies.
4. A common approach to cleaning up banks’ toxic assets has been agreed.
5. The world’s poorest countries will receive $100 billion extra aid.
6. G20 countries are already implementing the biggest economic stimulus “the world has ever seen” – an injection of $5 trillion by the end of next year.

“This is the day that the world came together to fight back against the global recession, not with words, but with a plan for global recovery and for reform and with a clear timetable for its delivery,” Gordon Brown said.

Despite their differences (The US and UK emphasized the need for public spending to ease the crisis while France and Germany were keen for tougher financial regulation), the major parties were able to come together and find an agreement on how to attack the financial crisis, albeit with some threats to leave from the French delegation if there were no concrete results. 

Question to the Blogosphere:  What do you think was the driving force behind the ability of the leading nations of the world to come to an agreement?  Do you think this plan will be successful?  Why did the richest countries in the world find it in their interest to increase aid to the poorest countries in the world?  Do you think this increased aid will change anything for the people of the poorest countries?  This is not the first G20 summit we’ve ever experienced, why only now are they instituting global financial regulatory institutions?