Questions abound regarding the meeting of G-20 heads of state on the global crisis scheduled for Nov. 15 in Washington.
British Prime Minister Gordon Brown and French President Nicolas Sarkozy have set lofty expectations for the meeting and follow-on work, with talk of a "new Bretton Woods." Meanwhile more technocratic types, while acknowledging the need for a political foundation for change, fret about grandstanding. They also point to the tough technical work on the world's financial plumbing -- much of it already underway in groups such as the Financial Stability Forum, working under the aegis of the Bank for International Settlements -- required for a real fix.
How then to take
the remarks of International Monetary Fund managing director Dominique Strauss-Kahn (pictured) in an interview in Thursday's Le Monde, which come on top of the IMF's
announcement Wednesday of a $100 billion short-term funding facility -- and a streamlined way of accessing it -- for developing countries judged to have good economic policies in place?
The
headline on the English-language wires is Strauss-Kahn's promise to offer a new plan for global regulation at the Nov. 15 meeting. But there's a lot more in the interview. At times he sounds expansive -- for example, saying that the IMF can have, at least for a while, the role of an architect, not part of its mandate in the past. That plays well in France because the IMF is led by a Frenchman and is an organization where Europeans hold plenty of sway. And of course, Strauss-Kahn hopes to be president of France someday.
Yet he also acknowledges the work of the
Financial Stability Forum, which gathers senior reps from many different financial authorities and institutions around the world, and which has already weighed in on such crucial but arcane topics as bank capital adequacy standards and the need for a clearing house for swaps.
There's an interesting mix of politics and practicality -- both of them essential ingredients in this process -- on display. Whether it's the right mix we'll have to see. -
Kenneth Klee
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