G20 Action Plan: no concrete steps to revive the world economy

The leaders of the 20 leading industrial economies emerged from their much anticipated financial summit in Washington with an action plan which is long on generalities and short on concrete steps on how they will revive the world economy. While they have pledged to work together to restore global growth, they proposed no clear pledge for coordinated tax and interest rate cuts.

Key issues agreed to by world leaders at this summit included:

• reform of international financial institutions such as the World Bank and the International Monetary Fund;
• an agreement by the end of 2008, leading to a successful global free-trade deal;
• improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions;
• making sure banks and financial institutions' incentives "prevent excessive risk taking;"
• asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system;
• strengthening countries' financial regulatory regimes; and
• taking a "fresh look" at rules that govern market manipulation and fraud.

G20 leaders say they will meet again by 30 April, 2009, to review progress. That meeting will probably be held in London, with US President-elect Obama attending.