G20 Tightens Rules, Loosens Purse Strings

World Leaders Vow To Regulate "Shadow Banking System" While Pledging $1 Trillion For Struggling Nations

(CBS/AP)  In an effort to end the global economic crisis, world leaders pledged Thursday to give $1.1 trillion to the International Monetary Fund and other institutions and crack down on tax havens and hedge funds.

"This is the day the world came together to fight back against global recession," British Prime Minister Gordon Brown said at the summit's conclusion, though he cautioned that "there are no quick fixes."

U.S. President Barack Obama hailed the summit as a "turning point in our pursuit of global economic recovery."

Mr. Obama said the G20 nations agreed on "unprecedented steps to restore growth and prevent a crisis like this from happening again."

In a communique capping a dramatic one-day gathering, the leaders announced the creation of a supervisory body to flag problems in the global financial system - but did not satisfy calls for new stimulus measures.

They did, however, bridge the gap between the United States and some European nations over how far to regulate the market and curb the excesses that sparked the global economic crisis.

Brown announced agreements to place tighter restrictions on the "shadow banking system" - pulling hedge funds into the realm of global regulation.

"The banking secrecy of the past must come to an end," Brown said.

The Group of 20 also agreed to put an end to tax havens. Brown and French President Nicolas Sarkozy said on Thursday that Organization for Economic Cooperation and Development would circulate a name-and-shame list of countries that serve as tax havens. Those nations could also face sanctions if they did not submit to new regulations.

Sarkozy, who earlier had threatened earlier to walk out if unsatisfied with the outcome, also praised Mr. Obama for helping to create consensus and persuade China to agree to publish lists of tax havens.

"There were moments of tension," Sarkozy said. "Never would we have thought to get as big an agreement."

In its pledge to increase foreign assistance, G20 leaders said the IMF would receive $500 billion to the IMF so it can increase its loans to governments struggling because of the financial crisis, Brown said. G-20 nations will also give $250 billion in trade finance over next 2 years.

Vincent Cable, one of the top economic thinkers in Great Britain and a member of Parliament, told CBS Evening News anchor Katie Couric he thought the summit was encouraging.

"They didn't, of course, reach agreement on the fundamental issue of how you stimulate the world economy but, on many other issue, there was something really positive," Cable said. "I think particularly putting a lot of money into their international monetary fund, the world bank, it will help other countries head off what otherwise could be really disastrous set of financial crisis."

Brown also said the G20 nations vowed to fight off protectionism, saying the increased trade would be essential to a global economic recovery.

"I hope that the heads of government mean what they've said about naming and shaming countries that resort to protectionism," Cable told Couric. "We cannot go down that road again."

Brown said the G20 will create a new financial stability board to ensure cooperation across frontiers, to spot risks to the world economy and - together with the IMF - provide "the early warning mechanism that this new global economy needs."

Brown says it is essential that the world does everything necessary to "rebuild trust" and make sure "a crisis such as this" never happens again.

The final deal will also include proposals making sure companies more tightly link executive salaries to performance, a measure that reflects public outrage about the huge retention payments, bonuses and golden parachutes granted to banking chiefs before the sector collapsed.

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Read the complete G20 summit communique

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German Chancellor Angela Merkel called the measures "a very, very good, almost historic compromise" that will give the world "a clear financial markets architecture."

Sarkozy and Merkel had been adamant that the G20 meeting must take concrete steps to more closely regulate banks, hedge funds and other financial institutions.

The push for greater regulation may signal a belief that unfettered capitalism has gotten out of control, reports CBS Evening News anchor Katie Couric.

President Obama had three tangible goals for the summit, White House Press Secretary told CBS' The Early Show Thursday. Among them were tighter financial regulations and increased help to emerging economies - two ideas largely embraced by other leaders. But Mr. Obama also wants to see other nations, particularly in Europe, step up their own stimulus programs.

Despite the absence of coordinated stimulus, Mr. Obama called the one-day London gathering "very productive" and historic because of the scope of the challenges the world faces in righting the economic crisis that's wreaking havoc on virtually every country.

While the leaders did not announce any new stimulus measures, Brown said the $1 trillion deal to boost funds for the International Monetary Fund, World Bank and other global institutions was unprecedented.

"For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world's poorest," Brown said. "This is a collective action of people around the world working at their best."


The G20 leaders also said that developing nations - hard-hit and long complaining of marginalization - would have a greater say in world economic affairs. They vowed to renounce protectionism and pledged $250 billion in trade finance over the next two years - a key measure to help struggling developing countries.

European and U.S. markets surged ahead Thursday as the outcome of the summit came into view.

Meanwhile, the European Central Bank cut its benchmark interest rate by a quarter of a percentage point to 1.25 percent Thursday - a record low - to help the 16 countries that share the euro combat the economic downturn.

As leaders met in the Docklands, a former shipping area on the Thames river that was redeveloped as an international business center, protesters began a second day of demonstrations. Security was tight at the summit venue; hundreds of police manned barriers and checkpoints around the security perimeter.

Demonstrators gathered outside the London Stock Exchange near St. Paul's Cathedral. Riot police took up positions as well, ringing the stock exchange.

French daredevil Alain Robert scaled Lloyds of London's high-rise headquarters as office workers below snapped photos. Robert, dubbed the French spider-man, has scaled dozens of tall structures around the world without ropes or harnesses to draw attention to global warming. He was later led away by police.

Near St. Paul's Cathedral in the financial district, protesters played a giant Monopoly game.

"The question is of course who has got the monopoly? It is fairly obvious the G20 are the global financial elite," said protester Clare Smith, 27. "Meanwhile the poor are getting poorer."

Some 4,000 anarchists, anti-capitalists, environmentalists and others protested Wednesday around the Bank of England for what demonstrators had called "Financial Fool's Day."

They repeatedly overwhelmed police lines, vandalizing the Bank of England and smashing windows at the Royal Bank of Scotland. An effigy of a banker was set ablaze, drawing cheers.

Police arrested over 100 people.

The diplomatic highlight of Wednesday came out of Mr. Obama's meeting with Russian President Dmitry Medvedev. The two announced an agreement to restart nuclear disarmament talks - stalled since 1997 - and Mr. Obama accepted an invitation to Moscow in July.

It was a marked change in direction for the relationship between the two nations, which declined to near-Cold War levels under former President George W. Bush, primarily due to differences on NATO's eastward expansion and U.S. plans to install missile defense hardware in Eastern European nations, close to Russia's borders.

[sjc_1]

The IMF is for everyone else. Developed and developing countries have already issued their plans for stimulus and recovery. This is for countries that will be affected by the slow down and have no way of dealing with it.

[yurang]

?????

[heavynne]

Taebok, public schools, public libraries, public police department, fire departments, and all those programs you mentioned are subsidized by local people, NOT THE FEDERAL GOVERNMENT. My police department is paid by ME, not Washington DC. Just like my firemen, my teachers, and the books in the library are bought by ME!
Posted by Rowdy104

Wow, you must be rich. LOL!!!!!!

[pepperwood2]

The American Dream or is it another American Scheme? The Rest of the Story!

Issue #1?Obama Resurrects Death Tax
Buried as a footnote on page 127 of President Obama?s budget is a provision that imposes what the Wall Street Journal is calling the ?largest increase in the death tax in U.S. history.? Although President Obama has claimed his budget does not raise taxes on anyone earning less than $200,000, this footnote does, in fact, increase taxes. Current law is set to eliminate the death tax altogether in 2010 but now Obama?s budget will call for the death tax rate to be 45 percent in that year. The death tax is one of the most anti-family of all tax measures because it discourages individuals from passing on inheritance to their children. One-third of small business owners reportedly wind up selling some or all of their businesses due to the death tax. So Sad & UnAmerican to pull an Elite Trick like this on the Working People.

[t5556661]

The greatest thing about a free country, is all you commies are free to go....So go.

[t5556661]

Bye bye commie.

[t5556661]

What's the problem endeavor-2009, too busy booking a flight to china, to respond?

[t5556661]

Excellent, They are my friends!!!!

[t5556661]

I spent a summer in Turkey in 1984,... ironic year I know, but the people constantly told me of their fight against communism, and in 1978 their problem was apparently resolved in an American Patriot sort of way, as they felt a kinship with Americans as they told their story of their fight for freedom. The troops were sent out to kill the communist. As it went " Are you capitalist or communist?" communist were gunned downed on sight. Commies soon started doing the same, gunning down capitalist, but in the end, justice prevailed, good conquered evil, and we have a capitalist friend in the muslim world. Commies know only one path, when are we going to make a stand?

[atemk]

What is it with these people who are saying " COMUNMISIM, SOCHIALISIM" that Obama is working for,,it's a lot of sickeing talk of the man, when he is only trying to put this country back on it's feet? These people must live in a very dark and scary world?
Obama is strictly there for the people and is making good headway and is doing the best of all past GOP presidents in keeping their campaign promises, he will never promote any such type of government. He loves the USA and is much more of a American then Bush, Limbaugh, Plain, Cheney Coulter and all of them that want him to fail

[pepperwood2]

Brown says it is essential that the world does everything necessary to "rebuild trust" and make sure "a crisis such as this" never happens AGAIN or Again or .........no until the next time. Famous last words coming from these same People who pick Tax Cheats & Frauds to run Our Country.

A group called Wall Street Watch is out with a report that finds that ?Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists?

The report, "Sold Out: How Wall Street and Washington Betrayed America," concludes that the contributions were ?aimed at undercutting federal regulation? and ultimately ?led directly to the current financial collapse.? So we can be sure this is the NO CHANGE we can count on. Its enough to make you puke. What these Clowns are getting away with.

[reasoned1955]

And to the socialist haters... well you better give up your public schools, your fire department, public parks, public libraries etc etc... all come from socialist ideals
Posted by taebok at 3:45 PM : Apr 2, 2009
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All so true...well said. We should abolish national currencies (specifically the dollar) and go to one world currency (much like the Euro). I think we should also abolish borders and immigration controls. People could move freely and pursue jobs anywhere in the world. I also don't like the disparity between the quality of public services being tied to the affluence of a given community or neighborhood. We should spread the public dollars evenly and provide comparable levels of service regardless of location. Some will improve while some will decline. That's just the way it is. I also think we should consider having a ruling body outside of national interests. Kinda like a World Supreme Council. These folks would represent the world's population much better than these manmade borders and their biased leaders. We don't need England, we don't need Argentina, and we don't need the United States of America. Let's all become citizens of the world and be free in the truest sense of the word.

[robertx13]

I've just watched "The Obama Deception"

Anybody want to tell me how this is "Obama's Deception" and not George W. Bush, Bill Clinton, George H.W. Bush, Ronald Reagan, Jimmy Carter, Richard Nixon, Gerald Ford and lyndon B. Johnson! Why now when after he took office, If this has been going on since the Kennedy assasination why has all this "information" now coming to light? And IF this is all true would it be "McCain's Deception" or not? I'm just trying to understand this speculation of the "Global Banking Elites" are really being behind our government. This seems farfetched to me. Because its pretty weird that all this...Garbage really i can't put it any other way, now comes to light after the 1st African American president takes office. Anyone care to elaborate? Thank-you!

[onesword]

I feel like this if everyone from the rich to the poor was not bothering the government and was looking to them for some sort of assistance. We wouldn't be bothered with them. But since everyone needs some sort of guidance, regulation, sensory, assistance etc. etc. Wa La you have them all in your business and personal life. The worst it gets the more their into your life trying to be the peace maker.

[robertx13]

We don't do communism here....it's that simple.
Posted by TheMasses21 at 3:36 PM : Apr 2, 2009

We dont have a comunist state and to say so is unamerican! specially of you do not live in our country.

[onesword]

a classless system where every body lives in labor camps and the government points their fingers at the jobs they need to do, puts them up in flea bag housing with disease rate rampant, child mortality rate is next to nothing, they go nowhere, do nothing but labor and provide riches for the imperical elite and the military that kills for them....

*****************************************************
This was going to happen if things kept going the way it heading. The middle class and the poor would have been the classless. The CEO and corporations would have been imperial elites.

And by the way our freedom - we're slowly paying for it. Freedom it's not free. It costs you.

[atemk]

I truthfully hope that G-20 will really find the way to a better world harmony for all.

[specialty8]

Lovegetpeace,
You may have your wish on that amendment. If Obungler has his way, we may never see another election. We all will depend on the goverment to tell us what to do and what to think.

[lovegetpeace]

I hope we have finally killed that Toxic GREED!

[julesarcher1]

Hey, it's happy hour . . .