I did not find any press release accurate enough to post it. The I write this message without link, sorry.
Why is this important? Probably, Europe (Eurozone plus UK) today weigh around 20% of the final decission, being Germany above 15%). Being USA, Japan and China the other 20% and the rest (mostly Saudi Arabia, Russia, India and Brasil) another 20%. Probably Russia counts above 15%. This is my own estimation on how much each government counts for the short term fate of the global economy. Decissions: In my opinion, one of the most important decissions (if not the most important one) is where decissions will be taken. This decission will not be done in the G7 (or G8 if we talk about politics) group (the developed countries including Russia), this decission will be done in the G14 (the G7 plus the emerging countries). Somehow, they accept that the engine of the real world is no longer the G7, let us say that what the G7 might decide is just useless paper if emerging countries decide something else. Anyway, in my opinion, the important position that is still unknown is Japan. The European proposal: 1.- All financial agents and institutions must be regulated, not just banks. This includes rating agencies. 2.- To change and unify bookeeping and accountancy rules and best practices in order to avoid bubbles as much as posible. Somehow, it means a global and unified rule of the concept of fair market value and how to apply it to books. 3.- A new international group built by ministers of finance, governmental agencies and central banks to act as an emergency reaction group when crisis appear in the future. Not clear to me if either this group will have a formal structure, known mechanisms for meetings, under which terms and conditions it will be urged, etc. 4.- To reinforce the current international institutions (IMF, WTO, etc.) to monitor the global financial system. Another decissions that are not relevant for other economies but important for the European economy are 1) to use in Europe the same "criteria" that other countries apply (in particular USA). The reason is that European banks are undervalued because their assets are not valued under "exhuberant" premises, it makes that their balance sheets look poorer than their competitors at the other side of the ocean. In my opinion, criteria should be the opposite, to force US banks to use conservative criteria, but as usual politics and image is in charge and they prefer riskier policies as far as it offers a better look of the banking system to European citizens. 2) a message that they will not allow any single financial institution to fail (in practice just public relations because they did not agree on anything in practice). Until now in some cases they have nationalised some banks already, totally or partly, and they have softened regulations (not formally but in practice) to allow some merges and acquisitions. My comments: Silence about a new currency system does not mean anything. That sort of news will be the best kept secret until it will be announced, if something is announced after the G14. The opinion of Japanese authorities, in my opinion the key question mark nowadays, is a big question mark yet. The first three points sound reasonable, pity it did not happened years ago. But it foccus in the organization, not in the contents and obviously the contant matters as much as the formal features. To use the existing institutions, such as IMF, can make things faster but more difficult. They are extremely critisized among emerging countries as they are just a reflect of the past. The balance of power inside those institutions does not reflect the balance of power in the real world, also, as proven during the recent banking crisis in USA, they apply double standard for developed economies than for emerging and developing ones, therefore its credibility is zero or below among emerging and developing countries. Peace and best wishes. Xi --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
