News / Economy

G-20 Leaders Wrestle with Debt, Trade, Regulation

Leaders from the world's 20 most important economies gather in Toronto next weekend [June 26-27] to discuss the best ways to guide the global economy into a stronger recovery. 

The leaders gathering in Toronto are from nations that account for 90 percent of global economic output, 80 percent of world trade, and two-thirds of the world's population.

Many of these leaders agree that the global financial crisis made it clear there is a need for better ways to regulate financial firms, but they disagree on how to go about it.

Some finance ministers are calling for banks to lend a smaller portion of their money and to keep more on hand in case a loan or investment goes bad.

Other ideas would limit the amount of borrowed money, or leverage, financial firms can use and seek ways to cope with failing financial companies that minimizes the damage to the rest of the economy.

Jose Vinals of the International Monetary Fund expects leaders in Toronto to decide whether to tax banks to pay the cost of future financial problems.  But he says they will put off making decisions on other issues.

"Toronto will be a crucial time to examine where is progress in order to continue moving the regulatory agenda forward for the final decisions to be taken in Seoul [, South Korea].  This is the expectation," Vinals stated.

Sebastian Mallaby of the Council on Foreign Relations, says it is crucial for the diverse nations of the G-20 to work together to govern their financial firms. "Financial institutions are cross-border; they are multi-national; they are global -- so you ought to have global rules to try and deal with them.  But that is not the way the Congress is dealing with them in the United States and that is not the way I expect European regulators will go either," he said.

Mallaby is the author of a book on financial issues called "More Money Than God" and says international cooperation might fade as trade resumes and many economies continue recovering from the 2008 financial crisis.

Another kind of crisis erupted in Greece as that nation's high levels of debt raised doubts among lenders that they might be repaid.  Efforts to reduce the deficit by slashing government spending sparked riots in Athens.

Europe's stronger economies, especially Germany, gave Greece little choice. They insisted that Greece institute a strict austerity plan as a condition for aid.  G-20 nations also are expected to discuss targets for cutting deficits.

Economist Fred Bergsten of the Peterson Institute for International Economics says the European debt crisis is high on the G-20 agenda and that it is a warning to other nations. "The United States and other countries face similar risks, albeit so far on a smaller scale," he said.  "But if the problems are not corrected, they could be just as big here, just as big in other deficit countries around the world."

The leaders will also talk about global trade imbalances, including the huge trade deficit run by the United States and the massive trade surplus earned by China.  The imbalance is a source of political friction between the two countries.

About a week before the summit, Chinese officials said they would allow trading in their currency to be more flexible, meaning it would probably become stronger.  A stronger Chinese yuan means Chinese-made goods would be more expensive on world markets, which would reduce what Beijing's critics say is an unfair price advantage that contributes to trade imbalances.  Strengthening China's currency would also make goods made elsewhere less expensive for Chinese consumers, drive up imports, and ease trade tensions.  One key question on this issue is how much and how quickly Beijing will allow its currency to change.

Leaders of eight industrialized and mostly wealthy nations, known as the G-8, will get an early start on these difficult issues by meeting Friday and Saturday [June 25-26] at a resort in rural Canada, a short distance from the G-20 meeting in Toronto.

You May Like

Unpaid Kurdish Fighters Sign of Economic Woes

Sharp cuts in Kurdistan's budget by Baghdad, falling oil revenue, coping with refugees, inflated public sector have hit regional economy hard More

Koreas Exchange List of Envoys for Family Reunion Talks

Officials will discuss date, venue and number of participants for reunion; Seoul hopes to hold event late this month More

China Targets 197 in Online Speech Crackdown

Nearly 200 punished for 'spreading rumors' online in ongoing crackdown on free speech More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Calais School Offers Another Face of Europe’s Migrant Crisisi
X
Lisa Bryant
September 02, 2015 6:19 PM
Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.

VOA Blogs

World Currencies

EUR
USD
0.8905
JPY
USD
120.20
GBP
USD
0.6541
CAD
USD
1.3262
INR
USD
66.242

Rates may not be current.