After the first day of meetings of the G-20 in Washington on Saturday, there seem to be many proposals for steps that need to be taken in the future, but no real answers for what it is that will help solve this problem in the near term. Although not yet official, it is expected that the final draft of the meeting will contain some of the following, broken down into two parts:
- New guidelines to be established by the end of March to be discussed at the next G-20 meeting to be held in April at a venue not yet determined.
- In the first part they are going to call for greater government efforts to prop up economies, cooperation to create international regulation of the worlds' financial systems, steps taken to help developing countries, and countries to back off the temptation to return to protectionism. Some of the specific recommendations that are being requested from finance ministers are said to include a look at global accounting rules, the risk-reward component in executive compensation, an examination of oversight and regulation and greater hedge fund and derivatives regulation and others as well.
- The second part of the draft is said to be the "action plan" which will look at transparency, regulation, the process of bringing a feeling of trust back to the market participants, international cooperation and reform.
It appears, however, that if you look at the words that I have highlighted, the tone contains nothing specific but rather government speak for we have a big problem, these are the areas of importance, we have no idea how to fix them but will push it all off until some time in March so that we have have time to figure something out. We can also throw all of it onto the new administration.
As has been the case recently, when governments speak either in unison or individually, it does little to ease the mind and seems to indicate that the problem may be bigger than any of us know.