World summit aims at closing gaps in finance market rules

The leaders of the world’s top 20 economic powers are expected to agree on Saturday to close off all gaps in the regulation of global finance markets following a financial crisis that is threatening to plunge the economy into recession.

The government heads of the Group of 20 nations gathered on Friday night in the White House for a dinner hosted by US President George W. Bush and are expected to sign off on the agreement at an historic summit on Saturday.

The move to monitor world financial markets comes in the wake of a round of stock market turmoil and a sharp downturn in the global economy.

“The stakes are high,” Bush said in opening the dinner. “We are determined to fix the problems that led to the (financial) turmoil and return the global economy to long-term prosperity.”

According to a draft declaration obtained by IANS, world leaders aim to ensure “all financial markets, financial products and market participants” are subject to regulation or appropriate supervision.

This is likely to involve a crackdown on hedge funds, tax havens and other financial instruments that have emerged in recent years as part of the fast-paced globalisation of world financial markets.

Saturday’s summit marks the first ever meeting of leaders of the G20, a bloc that brings together leading industrial nations and emerging economies, and comes amid growing pressure for significant changes to the regulatory structures governing the global financial system.

The leaders are meeting against the backdrop of a sharp economic slowdown, with banks curbing lending activities, consumers keeping their wallets closed and a drop in commodity prices hitting developing countries’ exports. The International Monetary Fund last week forecast a global recession in 2009.

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