The G20 meeting of finance ministers and central bank governors met in Busan, South Korea, over the weekend. Their final communiqué is here. Two developments in particular are worth noting.
First, in my recent post on stimulus and sustainability, I concluded by noting that the voices calling for early fiscal adjustment were growing louder. On most interpretations of the meeting in Busan, the G20 has now joined that chorus.
Second, the group has abandoned proposals for a global banking levy. This is marks a defeat for a powerful group of countries — the US, Germany, the UK and France, which, along with the IMF, had supported the idea — and says something interesting about the workings of the G20. It also delivers a victory for position taken by Canada and Australia, and reinforces a growing impression that, despite earlier pledges to coordinate financial reform efforts, countries will increasingly follow their own national preferences.
