G20 fails to settle on plans for bank regulation (+ analysis); Obama urges continued spending while summit leaders vow to cut deficits; South Korea promised US FTA by November; Germany comes under pressure to start buying; and more

Top of the Agenda: G20 Postpones Bank Regulations, Cuts Deficits

Leaders at the Group of 20 meeting in Toronto postponed (NYT) a new set of requirements on capital and liquidity for banks until November, when the G20 next meets in Seoul, South Korea. The G20 said it aims to adopt the rules by the end of 2012, but cautioned the standards would be "phased in over a time frame that is consistent with sustained recovery and limits market disruption." Unlike last year's G20 pledge, which set a deadline of 2012 for increasing the amount of capital banks must hold to absorb shocks, the phase-in is now more open-ended (Reuters), allowing different speeds for different countries. US Treasury Secretary Timothy Geithner said negotiators wanted to ensure that limiting risks taken by banks would not dampen the recovery by constraining lending.

US President Barack Obama urged the G20 to continue spending to support growth, but summit leaders agreed to halve annual deficits (WashPost) within three years.

Analysis:

In this First Take, CFR's Sebastian Mallaby says the latest gathering of the world's leading economies failed to signal a clear path to resolving global debt and growth concerns but the Toronto summit can claim success in positively influencing major powers' economic policies.

In the Guardian, John Hilary says G20 meetings are ineffective because they have failed to address any structural problems in global finance and the economy, and have not addressed climate change

In the Business Standard, Arvind Subramanian says the G20 worked because it "multilateralized" China's currency issue. Now Germany needs to reform its trade imbalance problem, he says

Background:

This CFR Backgrounder looks at the range of policy concerns of each G20 country going into the summit

Read the G-20's Toronto Summit Declaration.

 

PACIFIC RIM: US Signals Move on South Korea Trade Deal

The United States said it will seek to complete a long-stalled trade deal with South Korea (FT) before the G20 meeting in November.

China-Taiwan: Taiwan is scheduled to sign its first trade treaty with China (Bloomberg), casting aside the Chinese claim that Taiwan is a renegade province in favor of tightening economic integration.

 

ELSEWHERE:

- Obama, Cameron: BP Should Not Implode
- Germany Pressured to Reduce Trade Surplus

 

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org