September 24-26: G20 summit

On September 24 until the 26, the G20 summit will take place in Pittsburgh, Pennsylvania. The group of finance ministers and central bank governors from 19 of the world’s largest national economies plus the European Union will gather to discuss the financial state and try to get agreement on proposals aiming to avoid a repeat of the financial crisis. The summit promises to be interesting as already seems to be two camps. The leaders of France and Germany, Nicolas Sarkozy and Angela Merkel are taking an united position and urging the European Union to join them. They had a meeting in Berlin on August 31st and warned that some bankers are already back uo to the same old tricks from before the financial crisis. On Tuesday, Sarkozy announced that Paris will impose strict controls on the bonuses banks pay to their employees. He said that bank employees should also be held accountable for poor performance by having their bonus payments reduced. “We want to see things changed in Pittsburgh,” he said, “These excesses cannot be allowed to be repeated as if nothing ever happened.” To this Mrs Merkel added: “To the surprise of many, we’re noting in several financial centers of the world that the banks that got back on their feet again are behaving just like they did before the financial crisis. This mustn’t repeat itself.”
The British and the Americans are not totally in agreement about this. Tim Geithner, US treasury secretary, agrees with comments by Gordon Brown that limits on bank bonuses must be part of the debate, but there are doubts that the Obama administration, already in trouble to pass healthcare reforms through congress wants to face another battle with the protected bonus culture of Wall Street and the American banks which have grown immensely large again and seem not too far away from their old tricks.
We should pay attention to the results as they would affect all of us.