Wednesday, February 4, 2009

More on the G20 and the reform of the global financial system

A quick post to keep those interested in the ongoing development of the G20's plans to respond to the global financial crisis, and in particular the GAL-related elements thereof, updated. The Washington Summit of November 15 last year established five different priorities for reform:

- Strengthening transparency and accountability
- Enhancing sound regulation
- Promoting integrity in financial markets
- Reinforcing international cooperation
- Reforming the International Financial Institutions

Although the 1st and the 5th of these are of the obvious relevance from a global administrative law perspective, there will likely be elements of interest in each. From IFIWatchnet, we learn that the G20 has established a set of Working Groups charged with the tasks of evaluating steps that have been taken and making recommendations for future reforms in their respective areas:

As Chair of the G20 in 2009 the UK, working closely with Brazil and Korea 2008 and 2010 Chairs respectively, has established four working groups to advance this work for the next Leaders’ Summit on 2 April in London. Each working group is co-chaired by two senior officials from the G20, one from a developed and one from an emerging market economy. Each G20 country is represented on each working group. Experts from relevant international financial institutions, standard setting bodies, non G20 countries, business and academia have also been invited by co-chairs to input into the work of the groups.

(Interesting to note here the participation of relevant private and civil society actors in the Working Groups).

Working Group 1 is to focus on "Enhancing sound regulation and strengthening transparency", and will, inter alia, "make... recommendations to strengthen international standards in the areas of accounting and disclosure, prudential oversight and risk management" (As an aside, I wonder what the relation of these recommendations to the work of the International Accounting Standards Board (IASB) might be).

Working Group 2 is to deal with "Reinforcing international co-operation and promoting integrity in financial markets", including "the regulation and oversight of international institutions and financial markets", and proposals to "protect the global financial system from illicit activities and non-co-operative jurisdictions" and "strengthen collaboration between international bodies".

Working group 3 will look at the specific issue of "Reforming the IMF", and will "review the appropriateness of the IMF’s lending instruments and the effectiveness of its surveillance function, and will consider the sufficiency of its resources, and its general arrangements and accountability; and will look at the issue of reform of the governance structure so that it more adequately reflect changing economic weights in the world economy".

Lastly, Working Group 4 will perform a very similar function to Working Group 3, but with a broader remit to investigate the activities of "The World Bank and other multilateral development banks (MDBs)" - including their mandates, governances structures and policy instruments.

Plenty of GAL there, then - although mostly, it should be noted, based upon an "efficacy-driven" rather than a "justice-driven" governance logic. The Working Groups are to report to the Finance Ministers and Governors of the Central Banks of G20 States on march 14th, ahead of the next summit in London on April 2 of this year.

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