Do-little G20 summit cheers spared bankers

Mon Jun 28, 2010 7:46pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Paul Taylor

PARIS (Reuters) - Bankers voiced relief on Monday after world leaders abandoned a global bank levy and eased the timetable for new capital requirements at a G20 summit in Canada which posed questions about the forum's effectiveness.

Shares climbed in Europe and Asia, led by banks, after the U.S. Congress adopted a landmark financial regulation package on Friday, removing uncertainty, and the G20 dropped a 2012 deadline for more stringent risk-provisioning rules.

"We welcome the fact that the G20 has stepped away from imposing an arbitrary timeline for the implementation of new measures and has instead agreed to phase-in requirements agreements as and when national economic conditions allow," the International Banking Federation said in a statement.

Leaders of the main developed and emerging economies papered over differences on the right balance between reviving economic growth and cutting budget deficits at weekend talks in Toronto, in what was seen as a setback for U.S. President Barack Obama.

Unable to muster the unity of the past three crisis-era G20 summits, the leaders fell back on the "Sinatra doctrine," leaving each country to do it "my way," move at its own pace and adopt "differentiated and tailored" policies.

European leaders got what they saw as a green light to pursue austerity measures they consider essential to restore market confidence in the euro dented by the Greek fiscal crisis and wider concerns about high European sovereign debt.

"To be honest, it was more than I expected," German Chancellor Angela Merkel said of the G20's non-binding pledge to halve budget deficits by 2013 and balance budgets from 2016.

The United States had pressed the Europeans before the meeting to avoid withdrawing economic stimulus measures prematurely and urged countries with current account surpluses such as Germany to boost domestic demand.   Continued...

 
<p>U.S. President Barack Obama gestures as world leaders gather for a group photo at the G20 Summit in Toronto June 27, 2010. Pictured are: South Korean President Lee Myung-bak, Canadian Prime Minister Stephen Harper, Obama, Saudi King Abdullah, French President Nicolas Sarkozy (front row, L-R), Spanish Prime Minister Jose Luis Rodriguez Zapatero, Prime Minister Jan Peter Balkenende of the Netherlands, South African President Jacob Zuma, Russia President Dmitry Medvedev, Ethiopian Prime Minister Meles Zenawi and Turkish Prime Minister Tayyip Erdogan (back row, L-R). REUTERS/Jim Young</p>