G-20 to give $1 trillion to IMF, World Bank

The joint statement came from leaders who had publicly disagreed on the best ways to fix the world's slumping economy. While the United States had led the way in direct government spending, France and Germany held out for tough new regulations of the financial industry.

French President Nicolas Sarkozy, who had threatened to walk out of the summit if new regulations weren't tough enough, emerged a winner. By regulating hedge funds and cracking down on tax havens, the G-20 is putting the "madness" of deregulation behind and "redefining capitalism," he said.

The deal calls for a common global approach to deal with the "toxic assets" that have ruined banks' balance sheets — something the Obama administration already has proposed.

The $1 trillion in aid includes a $500 billion increase in loan authority for the International Monetary Fund; $250 billion in "special drawing rights" for developing nations; and $250 billion to finance trade deals.

The group will come together again this year, an indication its members don't think they've solved the crisis yet. But, Brown said, "we have begun the process by which it will be solved."

Page
  • 1
  • |
  • 2
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...