LONDON – On Wednesday, April 1, President Obama along with 19 other world economic powers came to a decision to pledge $1.1 trillion in loans and guarantees to countries suffering from the current global economic crisis.
The Thursday after, the Group of Twenty (G-20) decided that it was necessary for economic security to "crack down on tax havens and hedge funds." The G-20 failed to come to a unanimous agreement on stimulus spending that would combat the world economic crisis.
The $1.1 trillion will be dispersed over the next three years among multi-country development banks to lend to countries that have been affected by the economic slowdown.
According to the G-20, they will renounce the idea of "protectionism" and pledge $250 million in trade finance over the next two years. This is done in order to help struggling countries.
Leaders from the G-20 summit announced that there will be a supervisory body that will oversee and flag problems in the global financial system.
British Prime Minister Gordon Brown announced that new rules will be put in place on executive pay in accordance with their performance.
G-20 leaders agree that more say concerning the economy ought to lie with developing nations.
President Barack Obama was praised immensely at the G-20 summit. French President Nicolas Sarkozy, who was nervous as to the outcome of the summit, and who almost walked out, praised President Obama for helping to create some consensus among world leaders, and for persuading China to publish lists of tax havens.
"There were moments of tension," said Sarkozy." Never would we have thought to get as big an agreement."
Angela Merkel, the German Chancellor, said that the decisions made were "a very, very good, almost historic compromise that will give the world clear financial markets architecture."
On November 15, 2008, the G-20 held an initial conference in Washington D.C. to discuss the causes of the global economic crisis, ways in which to find solutions to it and potential solutions themselves.
According to the November G-20 conference, the root causes of the economic crisis are as follows:
· Weak underwriting standards;
· Unsound risk management practices;
· Increasingly complex and opaque financial products;
· And excessive leverage combined to create vulnerabilities in the (financial) system.
Underlying factors which helped in the inevitable world economic downfall are:
· Inconsistent and insufficient coordinated macroeconomic policies;
· Inadequate structural reforms, which led to unsustainable global macroeconomic outcomes.
Actions which need to take place in order for the economic world to recover are, according to the G-20 constitution:
· To continue vigorous efforts and take whatever further actions are necessary to stabilize the financial system;
· To recognize the importance of monetary (of something which relates to money or which is supplied and subsequently circulated in the economy) policy support, as deemed appropriate to domestic conditions;
· To use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive of fiscal sustainability;
· To help emerging and developing economies gain access to finance in the current economic slowdown;
· To encourage the World Bank and other multilateral development banks to use their full capacity in support of their development agenda;
· To ensure that the International Monetary Fund (IMF), World Bank and multilateral development banks (MDBs) have sufficient resources to continue playing their role in overcoming the current crisis.
(Information from www.g20.org)
To make sure that this kind of crisis doesn't happen again, the G-20 is developing proposals which will hopefully restore and increase the overall health of the world economy.
is a member of the 
Be the first to comment on this article!