Who are the G20?

The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the EU.

Here is a great link to the BBC’s overview of the G20 Summit.

The deal

On behalf of the G20, Mr Brown announced the following steps:

• Bankers’ pay and bonuses will be subject to stricter controls
• A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders and provide an early warning mechanism for the financial system
• There will be greater regulation of hedge funds and credit ratings agencies
• A common approach to cleaning up banks’ toxic assets has been agreed
• The world’s poorest countries will receive $100bn extra aid
• G20 countries are already implementing the biggest economic stimulus “the world has ever seen” – an injection of $5tn by the end of next year

IMF Boost

The IMF has been one of the biggest beneficiaries of the G20 summit.

The resources it has to help troubled economies will be increased to $500bn.

An overdraft facility will also be increased to $250bn (in the IMF’s currency, so-called Special Drawing Rights) that all members can call upon.

Mr Brown said that there would be a crackdown on tax havens to prevent the loss of sorely needed tax revenue. Shortly after the summit finished the Organisation of Economic Co-operation and Development published a blacklist of countries deemed uncooperative.

It said Costa Rica, Malaysia, Philippines and Uruguay had not made any commitment to respecting international standards.

“We have agreed tough standards and sanctions for use against those who don’t come into line in the future,” Mr Brown said.

President Obama was said to have played a key role in brokering the agreement on tax havens, resolving differences between France and China.

Hopes met?

French President Nicolas Sarkozy said that the conclusions of the G20 summit were “more than we could have hoped for”.

Source: http://news.bbc.co.uk/2/hi/business/7979483.stm

For more information on the financial crisis check out the Baseline Scenario.