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What are the French up to? March 31, 2009

Posted by Sverre in : Political economy, World politics , 1 comment so far

Just after writing the post on Le Maire’s speech, I came across this news story from AFP, that French president Nicolas Sarkozy is threatening to walk out on the G20 summit unless he gets his way.  According to Bloomberg, what he’s after is:

[…] to give more economic oversight power to the International Monetary Fund, and more financial oversight to an institution that would derive from the Financial Stability Forum, a group that brings together senior representatives of national financial authorities, regulators, central banks and international financial institutions.

The French leader is pushing for the G-20 to endorse accounting rules that reduce boom and bust economic cycles, and to regulate hedge funds and rating agencies. He’s calling for rules that would force banks to disclose traders pay to regulators, which could in turn ask financial institutions to increase reserves if their compensation system encourages risk taking.

The French do seem to be taking a confrontational line to get international actors to work together. This might possibly just be a display from Sarkozy’s side to show his domestic audience that he is taking action, without having to dig too deep into France’s own coffers. His moral-religious rhetoric seems to support this theory.

Trade protectionism rising March 18, 2009

Posted by Sverre in : Political economy , add a comment

The World Bank reports today that protectionism in the world is rising as a result of the current crisis. 17 of the G20 nations have enacted protectionist policies despite their pledge in the Washington action plan as recently as November 15 last year. Article 13 of the action plan states:

We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty. In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.

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