Despite being billed as a ‘Bretton Woods 2’ meeting, the first G20 heads of state meeting in Washington in mid-November agreed little of substance, and was criticised for an opaque, closed preparation process.

The next G20 Heads of State meeting will be in London on 2 April 2009.

Under the following five headings, immediate actions and medium term actions are listed in the G20 statement, but most raise problems rather than proposing specific solutions. Finance ministers are tasked with coming up with additional actions in a number of areas, including: “reviewing and aligning global accounting standards” and “reviewing the mandates, governance, and resource requirements of the IFIs”. A revival of the Doha ‘development’ trade round is also promised by the end of the year. Poverty reduction and climate change merit only a passing reference.

Strengthening transparency and accountability

Most of the focus is on accounting standards, with an immediate action to “address weaknesses in accounting and disclosure standards for off-balance sheet vehicles” agreed, and regulators asked, in the medium term, to “ensure that … financial statements include a complete, accurate and timely picture of the firm’s activities.” The inadequacy of the current governance structure – run by the industry body the International Accounting Standards Board (IASB) – is only hinted at: “…the governance of the international accounting standard setting body should be further enhanced.”

Enhancing sound regulation

Despite being by far the longest section – almost two pages – little concrete is agreed, most ‘actions’ are really a list of issues for further examination or regulation, including on: credit ratings agencies, capital adequacy requirements, credit default swaps and over-the-counter derivatives. The lack of ambition is characterised by the following medium term action: “To the extent countries or regions have not already done so, each country or region pledges to review and report on the structure and principles of its regulatory system to ensure it is compatible with a modern and increasingly globalised system.”

Promoting integrity in financial markets

Here the focus is – obliquely – on tax havens. In the medium term “measures to protect the global financial system from uncooperative and non-transparent jurisdictions” are called for. “Lack of transparency and a failure to exchange tax information should be vigorously addressed.”

Reinforcing International Cooperation

The shortest section, with little concrete. “Supervisory colleges for all major cross-border financial institutions” are proposed, though their role seems to be little more than meeting regularly with banks to discuss risk.

Reforming International Financial Institutions

Whilst recognising that “the Bretton Woods institutions must be comprehensively reformed so that they can more adequately reflect changing economic weights in the world economy” and the need for “emerging and developing economies [to] have greater voice and representation” there is support for enhanced roles for the World Bank and International Monetary Fund throughout the declaration. These platitudes give little assurance that significant reform will be agreed as even the most opposed to significant IMF governance reform for the last two years, the Europeans, have been publicly proclaiming the need for reform. More money for both is hinted at: “We should review the adequacy of the resources of the IMF, the World Bank Group and other multilateral development banks and stand ready to increase them where necessary.”

The IMF is asked, with an expanded Financial Stability Forum (FSF) to “take a leading role in drawing lessons from the current crisis.” No mention of is made of who will be asked to join the expanded FSF, though it is made clear that it will only be large emerging markets and not any of the smaller or poorer economies that are currently facing economic crises due to the global events.