A V Rajwade: A new G20 agenda?

Many conventional correlations in the global economy are breaking down

As preparations for the next G20 summit (Seoul, November) gather momentum, there has been some progress since the last summit — the Basel Committee on Banking Supervision constituted by Mathe Bank for International Settlements has agreed on new norms for banks’ capital adequacy standards (Basel III). These norms prescribe a significant increase in shareholders’ funds, and have also increased the capital charge for market risk. The US has enacted tighter and highly complex banking regulations, and the European Union (EU) is also well on its way to finalising financial reforms later this year. Neither of these may achieve the full extent of the reforms envisaged by the G20, but very strong and powerful bank lobbies have been working hard, in Basel, Brussels, London and Washington, to dilute the prescriptions