G20 One Step Closer To Consensus

Sep 15, 09 G20 One Step Closer To Consensus
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In a surprising move, the G20 finance ministers have suggested that its member nations continue with their stimulus programs and beginning formulating plans designed to cap bankers’ bonuses.

Although many economists believe that the global recession is winding down, the G20 finance ministers insist that expansionary policies should continue until there is definite proof that a recovery has begun.

Out of this most recent G20 meeting, emerged a broad consensus on limiting bonuses.  Many have come to accept the fact that exorbitant bonuses fueled the risky financial practices that caused the recession.

Rather than the mandatory pay caps, which France and Germany support, other nations believe that bonuses should be tied to performance because it would discourage unnecessary or reckless risk taking.

The G20 also addressed the concerns of emerging nations, especially the BRIC group.  These economies want a larger platform in global policymaking and the ability to affect IMF and World Bank policy

For most of these issues, the G20 has only made tentative agreements.  They plan to take up the issue of bonuses and emerging economies at their next meeting.

Most importantly, their commitment to maintain stimulus plans, despite pressure from some of the nations whose economies are recovering faster, ensures that the policies that are working to lift us out of a global recession will continue.

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