As the leaders of the G-20 prepare to meet in Cannes on 3rd/4th November, their discussions will be focused on the global financial system and seeking to ensure economic recovery. Their worthy agenda is described by host Nicolas Sarkozy as being “ambitious but realistic” in terms of strengthening financial regulation, co-ordination of economic policies, reforming the IMF and improving global governance, combating commodity price volatility and working on behalf of development.
However, the virtually complete lack of radical reform and clearing out of the financial system, both urgently needed, seem unlikely to be addressed by the G-20 leaders.
Issues that require fundamental, pressing and coordinated actions but which are not on the agenda for the G-20 Summit or indeed any other forum are; the regulation and taxation of shadow banking regimes such as hedge funds and private equity operations; dramatically reducing and regulating the vast scale and danger of the casino banking activities of derivatives trading (including commodities speculation and burgeoning complexity of ETF products); acknowledging and writing off the still enormous level of toxic assets remaining on corporate balance sheets, dealing with the unsustainable level of sovereign debt, immediately firewalling banking between retail and trading operations and properly accounting for the huge and growing level of off balance sheet and contingent debt especially governmental pensions liabilities.
In Cannes, my WS-20 Council colleagues and myself will instead of the limited agenda of the G-20 discussions be aiming to put forward proposals to deal effectively, comprehensively and resolutely with these untenable and destructive aspects of the financial system that are threatening the very basis of global society.
