Bankers Have Low Expectations for the G-20 Summit

As President Obama and the leaders of the 20 most powerful and developing nations in the world gather in London this week to develop a way out of the worst financial crisis since the Great Depression, many bankers here are questioning how likely they are to come up with viable reforms.

But while most analysts are certain that the summit will fall short of the grand expectations British Prime Minster Gordon Brown and his counterparts set out late last year, some bankers are mildly optimistic.

"It is very good to see that this is the G-20 summit meeting and not the G-7 or the G-8, given the gravity of the situation and the structure of the world today," Vittorio Perona, managing director of the energy and utilities group at the European investment bank Dresdner Kleinwort, told ABC News. "A longer table of world leaders could not be more crucial at this time."

Despite security concerns, Perona said the G-20 could not have chosen a more symbolic place to meet.

"In terms of location, the city of London could not be a more appropriate place to have the meeting since this is where capital flows really originated a few hundred years ago," he said. "Still, one would hope that while exercising their right to march, the demonstrators would not revert to violence to make their point."

As for the success of the G-20, Perona said it depends on several factors: How fully all the main countries are willing to agree on a common set of actions to manage the crisis, how willing they are to agree on the extent of the financial packages and, more importantly, where to draw the line.

"The key is to limit excesses that could be very damaging," he added.

Regulations vs. Reforms

One U.S. banker who spoke to ABC News on the condition of anonymity was less optimistic. "Are the G-20 leaders really going to solve anything in seven hours," he said. "I don't think 20 people in the same room, all with different agendas, are going to be able to come up with a real solution to the greatest economic crisis since the 1930s."

The real debate at the summit is going to be whether to pursue regulations or reforms, he said. And while many countries are struggling to halt inflationary pressures from setting in, everything, he said, reeks of protectionism.

Just as the United States set its campaign of "buy American" into full throttle after a historic $17 billion bailout, so has Germany, with its GM Opel brand, and, according to an article in today's Financial Times, a $858.7 million aid package sought by General Motors for Vauxhall, which is GM's U.K. brand.

At this point, however, it looks more like punishment of the banks than anything else with much of the blame being laid on the United States, the banker said.

"Everyone is trying to gang up on the U.S. right now," he said, "most likely from the bad years on the back of the Bush Administration. As the world's largest trading block and the world's reserve currency, it is easy for everyone to blame the U.S. for the financial crisis instead of taking responsibility for their own bad investments."

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