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G20 leaders eye more IMF funds, tighter rules
(Agencies)
Updated: 2009-04-03 00:23 LONDON -- Global leaders made headway Thursday on tackling the world's worst financial crisis since the 1930s, with possible deals to give more money to the International Monetary Fund and clamp down on tax havens and freewheeling hedge funds.
A British official said the Group of 20 rich and developing countries would likely approve giving more than $500 billion to the IMF so it can increase its loans to governments struggling because of the financial crisis. The official spoke on condition of anonymity because talks were ongoing. Two other people close to the negotiations said France and Germany had persuaded the Group of 20 leaders to back tougher language in the final statement on stronger financial regulations to avoid a repeat of the current crisis. They refused to be further identified because they were not authorized to speak to the media while talks continued.
"I believe that the text that has been circulated already reflects a very high degree of consensus and agreement between all of us," Brown told his fellow leaders. A draft communique, however, suggested that details still needed to be firmed up. Britain's Finance Secretary Stephen Timms said early discussions had been "lively," but added that countries would agree on sanctions against countries who refuse to sign up to new rules on regulating tax havens. "The era of banking secrecy is over," Timms said. As President Barack Obama and Brown joined other leaders at a working breakfast, protesters began gearing up for a second day of demonstrations, gathering 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. French President Nicolas Sarkozy and German Chancellor Angela Merkel have been adamant that the G20 meeting must take concrete steps to more closely regulate banks, hedge funds and other financial institutions. Sarkozy had previously threatened to walk out if the summit didn't achieve a strong statement on new financial regulations, warning that he considered action on tax havens, hedge funds and ratings agencies as the absolute minimum the negotiations must resolve. Sarkozy and Merkel want the G20 to publish a blacklist of tax havens and announce sanctions at the end of Thursday's meeting. The summit will also examine ways to get so-called toxic assets, unsellable securities such as mortgage-backed bonds, off banks' balance sheet where they are impeding lending to consumers and businesses. The British official said the boost to the IMF would include significant pledges from China, and in return there would be increasing efforts to give China and other emerging countries greater clout on the IMF. Spanish Economy Minister Pedro Solbes said the G20 leaders agreed "on making a major extra effort in terms of contributing resources and on what the IMF does," including adopting a model for granting more flexible loans. Obama has acknowledged that US regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying "we can only meet this challenge together." European leaders have balked at moving beyond spending measures already announced, arguing that their more generous welfare systems mean their spending levels will rise anyway as more people get benefits such as unemployment insurance. 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. 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. |
