BCM International Regulatory Analytics llc

G20 outcomes analyzed

The Toronto summit was always expected to serve as a way-station to check progress on the road to Seoul in November.  The summit text delivered solidly on those expectations.  The main deliverables can be summarized as follows:

• Papering over differences regarding fiscal policy;

• Creating a Working Group on Development;

• Handing off the climate change workstream to the United Nations; and

• Assuming authority for international economic policy matters from the G8 (leaving the G8 focused on foreign policy for the most part).

Also as expected, the main decisions regarding financial taxation, regulatory capital, IMF reform, cross-border resolution and other issues remain on target for decisions in Seoul at the end of the year.

This issue of The Risk Telescope analyzes the G20 Communiqué (including its various Appendices), together with the two reports issued by the Financial Stability Board and the two reports issued by the International Monetary Fund.  The inescapable conclusion is that while deep differences of opinion remain with respect to short-term international economic policy, substantial agreement exists on a broad range of regulatory policy matters.

One particular issue area merits additional attention in light of the IMF’s strong recommendations concerning financial taxes.  Therefore, Appendix A to this report provides a spectrum analysis of different tax proposals and their policy utility in order to facilitate discussion and analysis of these issues.