G20 LEADERS EYE MORE IMF FUNDS, TIGHTER RULES; RIOT COPS IN POSITION
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LONDON, APRIL 3, 2009 (STAR) Leaders from around the globe made headway yesterday on tackling the world’s worst financial crisis since the 1930s, with early signs of agreements to give more money to the International Monetary Fund (IMF) and to take a closer look at regulating hedge funds.
Two people close to the negotiations said leaders had agreed on giving more funds to the IMF so it could help developing economies reeling from currency woes and the effects of the global downturn. They also said France and Germany had successfully persuaded the Group of 20 leaders to back stronger financial regulations to avoid a repeat of the current crisis.
As US President Barack Obama and British Prime Minister Gordon Brown joined other leaders at a working breakfast in the city’s east Docklands district, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul’s Cathedral.
Riot police took up their positions as well, ringing the stock exchange.
Obama and Brown expressed confidence Wednesday that world leaders would come up with a strong agreement to address financial regulation, growth, and troubled banks.
But that optimism was marred by a split with French President Nicolas Sarkozy and German Chancellor Angela Merkel, who refused calls for more government spending and insisted the meeting must instead take concrete steps on tougher financial regulation.
There were signs Thursday that some headway had been made to ease the stand-off.
Britain’s Finance Secretary Stephen Timms, a deputy to Treasury chief Alistair Darling, said morning talks included discussions on when a blacklist of tax havens will be published.
Sarkozy, who had previously threatened to walk out of the conference if it didn’t achieve a strong statement on new financial regulations, warned that he considered concrete steps on tax havens, hedge funds and ratings agencies as the absolute minimum the negotiation must resolve.
Sarkozy and Merkel want the G-20 to publish a blacklist of tax havens and announce sanctions at the end of Thursday’s meeting.
Sarkozy and Merkel have tried to push regulation to the fore, calling for new scrutiny of ratings agencies and lightly regulated hedge funds. The summit will also examine ways to get so-called toxic assets – unsellable securities such as mortgage-backed bonds – off banks’ balance sheets where they are impeding lending to consumers and businesses.
British Business Minister Peter Mandelson said the G-20 countries were in broad agreement to put more resources into the international economy through the International Monetary Fund and other international financial institutions.
“I’m not saying that everything is sewn up. It isn’t,” Mandelson told BBC radio. “I mean there are arguments, or some tensions over precisely what resources we’re talking about.”
Spanish Economy Minister Pedro Solbes said the G-20 leaders agreed “on making a major extra effort in terms of contributing resources and on what the IMF does,” including adopting a model for granting more flexible loans.
Obama has acknowledged that US regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying “we can only meet this challenge together.”
He added that differences in the grouping had been “vastly overstated” and he played down an earlier US push for bigger government spending by European governments; instead he praised their efforts.
Brown foreshadowed agreement on issues including a possible $100-billion increase in financing needed to keep global trade moving, and support for economic growth and job creation.
European leaders have balked at moving beyond spending measures already announced, arguing that their more generous welfare systems mean their spending level will rise as more people get benefits such as unemployment insurance.
As leaders met in the Docklands, a former shipping area on the Thames river that was redeveloped as an international business center, protesters began a second day of demonstrations. Dozens were arrested in clashes on Wednesday.
Security was tight at the summit venue; hundreds of police manned barriers and checkpoints around the security perimeter.
Near St. Paul’s Cathedral in the financial district, police and journalists watched as protesters played a giant Monopoly game.
“The question is of course who has got the monopoly? It is fairly obvious the G-20 are the global financial elite,” said Clare Smith, 27. “Meanwhile the poor are getting poorer.”
Some 4,000 anarchists, anti-capitalists, environmentalists and others protested Wednesday around the Bank of England for what demonstrators had called “Financial Fool’s Day.”
They repeatedly overwhelmed police lines, vandalizing the Bank of England and smashing windows at the Royal Bank of Scotland. An effigy of a banker was set ablaze, drawing cheers. Police made 86 arrests. – AP
Chief News Editor: Sol Jose Vanzi
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