It was no Bretton Woods II. But the Washington economic summit
may have made history by, in essence, expanding the world's
financial board of directors - and starting a process that could
lead to more coordinated global action on the current crisis in
months to come.
Summit leaders agreed to hold a follow-up meeting on April 20. By
then, the US will be led by a new Obama administration, which may be
more inclined than its Bush predecessor to accept international
financial regulatory reforms.
That doesn't mean that a President Obama will accept the sort of
cross-border financial regulation that Europeans have long pushed
for, say analysts. But it may mean that at the least he will accept
a larger role for the International Monetary Fund (IMF) and other
"You can expect that the [Obama] administration will listen and
be more responsive precisely to where it is that America's actions
fit into the larger global context," said Colin Bradford, a
Brookings Institution expert on international economics, at a
seminar on the Washington summit.
Bretton Woods was the seminal 1944 conference held at Bretton
Woods, N.H., where 44 nations drew up the postwar global financial
order. They created the IMF and the World Bank at that meeting,
among other things.
The Nov. 14 and 15 Washington discussions were not designed to
reach those heights. Instead, their purposes seemed as much
political as technical, with leaders from Nicolas Sarkozy of France
to China's President Hu Jintao talking about domestic financial
rescue measures they have already taken.
President Bush served as host and made a forceful appeal to world
leaders that they not try to reinvent the free-market system.
"There was a common understanding that all of us should promote
pro-growth economic policy," said Mr. Bush after the sessions.
"There is more work to be done and there will be further meetings,
sending a clear signal that a [single] meeting is not going to solve
the world's problems."
In a postmeeting communique, leaders of the assembled group of G-
20 nations said they agreed a broader policy response is needed to
combat the current global economic crisis, based on "closer
Listing a series of general principles, the leaders pledged to
strengthen the transparency of their financial markets and their own
regulatory regimes, among other things.
They also agreed to look at executive pay levels to see if those
had contributed to the crisis, and to try to tighten regulations on
credit default swaps, complex derivatives that may have helped
credit problems cascade through the world financial system.
World Bank President Robert Zoellick said the summit was a
positive start. He praised China's $580 billion stimulus package and
called on other nations to initiate government spending initiatives
of their own. …