On February 9, Brookings, along with two Canadian partners—the Centre for Global Studies and the Centre for International Governance Innovation—held a high-level seminar in London with the British government to discuss and debate the most critical issues for the April G-20 summit in London.
The purpose of the event was to exchange views with U.S., Canadian and U.K.-based experts and senior U.K. officials who are preparing for the April 2 G-20 summit (officially referred to as “The London Summit 2009”).
The event was subject to the Chatham House Rule (no attribution of any views to any individual). It was preceded by remarks during a one-hour session with Prime Minister Gordon Brown, which was open to the press, as well as invitees from U.K. academia and civil society.
This note briefly summarizes the main points of discussion for each session.
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Johannes Linn, Senior Fellow and Executive Director at the Wolfensohn Center for Development, prepared this summary as a record of the substantive issues discussed at the high-level seminar.
Session with Prime Minister Gordon Brown
Prime Minister Brown stressed that the current financial crisis was a global problem requiring global solutions, hence the importance of the G-20 summit.
On the domestic front, Prime Minister Brown noted that the U.K. is pursuing a four-pronged effort on the financial crisis: Stop banks from collapsing, push monetary and fiscal stimulus, resume funding for business and mortgages, and ignite export and investment-led growth. In this process, Prime Minister Brown commented that the “bonus culture” in banking has to be reformed: “no rewards for failure, rewards only for long-term success.”
Internationally, Prime Minister Brown commented that the G-20 faces the same set of problems: The need for recapitalization of banks, monetary and fiscal stimulus, and the resumption of financial flows to emerging market economies (EMEs) and poor countries which have been cut of from investment and trade finance (he cited a figure that net flows to the EMEs in the last few years had amounted to $1 trillion per year, but would be cut to $160 billion this year). He also cited the risk of new protectionism (not only in trade, but also in the financial arena), which must be contained.
In this context, Prime Minister Brown noted that the international financial institutions are critical actors but need to be fundamentally reformed. The International Monetary Fund (IMF) needs to strengthen its role in surveillance, akin to an independent central bank, and needs new resources (loan facilities, trust funds, new Special Drawing Rights). The World Bank and regional development banks have to stretch their resources to support the EMEs and poor countries, and need to develop innovative funding approaches, including environmental bond facilities.
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In advance of the April G-20 leaders’ summit in London, Brookings organized a high-level seminar with the British government and relevant experts to discuss and debate the most critical issues for the summit meeting. British Prime Minister Gordon Brown made introductory remarks at the session, calling for a “bold leap forward” to prevent future financial crises, and noted that the IMF and World Bank need to change their roles post-crisis.