Wednesday, 18 February 2009

From G7 to G20 - The Financial Crisis

The G7 finance ministers meeting on the 13th passed almost un-noticed there were the requisite statements on coordinating the response to the financial crisis, resisting the pull of protectionism, and the importance of free trade, but no progress on an international trade deal, or a global response to the crisis.

The real priority is to shore up the banking system. Governments should take action together to remove toxic assets from banks’ balance sheets through insurance schemes, and reopen the flow of credit. Im surprised that Governments are mainly taking advice from bankers in this restructuring, when input should come from as wide as possible, including other sectors of the economy.

Attention is now focused on the G20 meeting in London in April, with many hoping that it will become the starting point for recovery, for a new global financial and governance structure.

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