>+ The G7 GROUP OF RICH COUNTRIES is likely to set up a new body dedicated
> to financial reform in developing countries. GX, comprising 20
> countries, including the G7 and those regarded as "systemically
> important", will be a talking shop with the aim of reforming banking
> systems and avoiding future financial crises.
>
>
>No doubt the agenda will be mainly neo-liberal. But perhaps not entirely.
>And this committee will have some elements of consultation rather than the
>IMF or the World Bank approaching each supplicant nation separately.
>
>Chris Burford
Hmmmm . . . I think your optimism is misplaced. Talks for this one have been going on for the last few years -- I was involved in the early stages before turning poacher. As far as I know:
1) The agenda will be entirely neo-liberal. You only get a ticket to this part if you're borrowing serious money on the international bond markets -- that's what they mean by "systemically important".
2) The G7's idea here is unlikely to bypass the G10 (=G7 plus Netherlands, Belgium, Sweden and Switzerland), particularly in an area like this (shutting the Swiss out of discussions on banking would be pretty dim). My guess is that things will be driven by the Basle consensus -- the developing countries will have swapped the IMF and World Bank for the tender mercies of a bunch of bank supervisors who don't even pretend to take an interest in development.
3) What this marks is the final round of a titanic battle which has been going on since 1994 for the soul of the world banking system. The IMF and World Bank have been trying to find new roles for themselves as guardians of the stability of the financial system. The existing guardians at the BIS have been viciously fighting off any incursions onto their turf. The announcement that the new group is going to be based around the national governments (who tend to take advice from their central banks on this matter), and not carried out under the aegis of the IMF is a pretty serious bloody nose for the Washington bunch.
dd
Oh yeh, while I'm at it, America's rudest economist thinks that the reason the yen's rising is that it's a feature of liquidity trap economics. Check it out . . .
http://web.mit.edu/krugman/www/strongyen.html
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