The United States Government is optimistic the G20 Summit in Pittsburgh 24-25 September 2009 will result in a number of agreements in practice control strategies that caused the current economic crisis.
The first points are likely to be approved is the need to strengthen the capital reserves of banks and other financial institutions. Strengthening the capital reserve will narrow down the large-scale investment by financial institutions to rely on debt.
Leading the New York Daily Times on Wednesday, September 23, 2009 report the U.S. Treasury Secretary Timothy F Geithner has been circulated framework of rules that require financial institutions to improve crisis pads keep falling value of the investment and the risk of lack of funds due to bad credit.
The second problem is the regulation of bonuses to financial industry executives in Europe and America. U.S. officials believe they will reach an agreement on this with European leaders. The main purpose of this regulation is to control the huge bonuses to financial industry bosses that the short-term results without making them responsible for the company’s long-term stability.
The third point is the most difficult issues under discussion include how to prevent large imbalances of global economy that many analysts believed to be the main cause of economic crisis.
Greatest inequality in the last decade is the disparity between the skyrocketing amount of U.S. debt and the level of economic consumption with the surplus rising China and other countries whose growth depends on exports. These countries reinvest surplus profits trillions of dollars to the United States, supplying the flow of money to maintain low interest rates, and worsen the speculation bubble in U.S. house prices.
But not a few experts who are skeptical of the results of this summit. Simon Johnson of the Peterson Institute for International Economics noted that the leaders of the G20 countries do not even try to make a deadline to end emergency measure providing economic stimulus.
Cornell University international economist Eswar S Prasad said there was a huge difference in macroeconomic issues. “China is looking at the regulatory framework as a cunning plan to divert U.S. attention to the large fiscal deficit,” he said.
Then what will the role played by Indonesia and other Asian countries? Legal Wait full report covering the summit directly.
