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Letter from America | 7
Thoughts on the
G20 Meeting
The magazine’s American correspondent
assesses the G20 summit
by Charles Lewis Sizemore, CFA
Chief Investment Officer,
Sizemore Capital Management LLC
www.sizemorecapital.com
T
he April G20 meeting in London incurred rescuing bankers from their own G20 leaders did agree to treble the resources
was the most widely anticipated poor decisions. Needless to say, both expec- available to the IMF to $750 billion and prom-
international event in recent tations and tensions ran high. ised to make available $250 billion to support
memory. This was supposed to Of course, no meeting could ever live up to trade finance in an attempt to “unclog” the
be the meeting in which world the hype accompanying this one. What global trading system. They also agreed in less
leaders put the broken global emerged on April 2 was a manifesto titled specific terms to continue aggressive fiscal and
economy back together again. The floodgates “The Global Plan for Recovery and Reform.” monetary stimulus programmes in their
of fiscal stimulus would be opened. As our leaders inform us, “We face the respective countries, though the appetite for
Globalisation and free markets would be greatest challenge to the world economy in said stimulus varies considerably from coun-
defended and bolstered. The financial system modern times; a crisis which has deepened try to country.
would be recapitalised and reregulated—and since we last met, which affects the lives of On the regulatory front, the G20 made a
this new regulation would extend to areas for- women, men, and children in every country, declaration titled “Strengthening the Financial
merly off-limits such as hedge funds and off- and which all countries must join together to System.” The focal point of this sub-mani-
shore tax havens. Some claimed that the April resolve. A global crisis requires a global festo was the creation of a new Financial
meeting was the most significant since the solution.” Stability Board (“FSB”) charged with provid-
Bretton Woods Agreements that shaped the What follows is prose so grandiose and lofty ing “early warning of macroeconomic and
post-World War Two international monetary as to be devoid of any meaning: “We start financial risks and the actions needed to
system. from the belief that prosperity is indivisible; address them.”
Given its high profile, the meeting also that growth, to be sustained, has to be shared; While most of the FSB Declaration was
attracted its share of discontents. The now all- and that our global plan for recovery must benign, there was one bullet point of which all
too-familiar anti-capitalist and anti-globalisa- have at its heart the needs and jobs of hard- expatriate investors should be aware. The G20
tion protesters made their expected working families, not just in developed coun- pledged,
appearance and even managed to storm a tries but in emerging markets and the poorest “…to take action against non-cooperative
Royal Bank of Scotland branch before finally countries of the world too.” jurisdictions, including tax havens. We stand
being pushed back by police. We have, unfor- We are not exactly sure what our leaders ready to deploy sanctions to protect our pub-
tunately, grown used to seeing masked anar- mean when they say that prosperity is indivis- lic finances and financial systems. The era of
chists following global summits like a roving ible. After all, most spend a considerable banking secrecy is over. [Emphasis ours]. We
band of outlaws. This time, however, they amount of state time and resources dividing note that the OECD has today published a list
were joined by regular citizens who were dis- us from our prosperity via taxation so that of countries assessed by the Global Forum
gusted by what they see as an unfair “bailout” they can realise their second belief, “sharing.” against the international standard for
system that burdens taxpayers with debts Moving on to more concrete proposals, the exchange of tax information.”
www.investmentinternational.com April 2009 Investment International
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