Simon Johnson of Baseline Scenario and MIT wrote a post today in anticipation of the G20 meeting in London next week. In it, he believes the same thing will be produced in the event as what the G20 finance ministers produced when they met a couple of weeks ago. He rested his point by saying that the states need to focus more on one thing: the IMF.
We need the IMF to have enough resources to help out when small and not-so-small countries get into trouble. Feel free to imagine IMF-less futures, but when the chips are down – as in Europe right now – to whom else can countries turn for money, advice, and the keys to international support?
This is in line with some of the reports called by some figures including Treasury Secretary Tim Geithner who called for increased funding for the IMF in order to provide further assistance to ailing countries particularly during times of distress. China provided the same insight but some European countries such as Germany believe that the IMF does not need as much as additional $500bn as was suggested by US’s Geithner. Half of that would suffice.
Apart from that, I am interested to see any differences in the communique that was produced some three weeks ago. Following is what came out from that meeting:
I agree things cannot be solved overnight but I’m not a fan of generalities. We’ve already read enough about the regulations each state intends to impose upon the financial system and we know they are committed to solving the crisis in coordination with everyone else. But perhaps something that’s more concrete would help and perhaps boost confidence in the system.