大象传媒

what is the point of these get togethers...apart from as hot air generating machines... fine words come out of every meeting but they are never turned into actions...

All set for the next economic bubble then.

But after all this will more jobs appear in the UK? All bankers seem to do is look after the no. 1, then when it goes wrong cry that someone else did the wrong thing.
If as workers we have to ' get on our bike' to get a job where do we go to?
Cleaning bank offices, or their houses?

RP: " Broad rules less amenable to gaming"

++++++++++++++++++++++

Sounds good! Then separate the Retail and Investment banking.

If they do not bring in a Glass-Seagal replacement, it will hit the fan again! Up to now, nothing has changed.

1. At 09:55am on 25 Sep 2009, jolo13 wrote:
what is the point of these get togethers...apart from as hot air generating machines... fine words come out of every meeting but they are never turned into actions...

-----------------------------------

Seven course dinners anyone? Obviously tele conferencing is beyond the wit of these troughers who sponge off the hard earned tax payers money.

There is no agreement on a number of issues at the G20:

1. What to do about regulation of financial institutions?

2. Who should pay for the rescue of international financial institutions when problems occur in a different country to the home country of the institution?

3. As Capitalism is regulated and the market mechanism prevented from operating (the too big to fail problem) what is to prevent every bank from being imprudent knowing that it cannot fail no matter how big and stupid its business model or bonuses.

3a to reiterate 3 above. 'the Banks have effectively subverted the state' and stolen it from the people.

I feel confident that none of these issues will be resolved. The result of this will be that those countries that are the home country of a bank will have to bail out all of its international liabilities (c.f. RBS) and, in effect, rescue the economies of every country in which the bank trades - this is unacceptable - and most unacceptable to the country with the biggest international banking sector, the UK, and the British people, both cannot afford to do i,t and will (eventually) not put up with it. Thus it is unacceptable the Gordon Brown (or his probable successor, David Cameron) to remain silent on the problem, for the Nation's good (and future tranquillity.)

It is also simply not an acceptable solution for Mervyn King to wring his hands and moan 'the banks are too big to fail' - to do so is yet another cause I have against the man as I believe everyone in the country will have if there is further costly financial stability. (Or as and when the true costs of the current situation become apparent.) Basically he let this situation happen. (This analysis, and these conclusions, apply to all other central bankers and regulators and their political bosses.)

Of course agreeing change between 20 members rather than 8 will probably be even more difficult; and when things go wrong, having 20 members means those who were responsible for the mess in the first place can look to spread the blame a bit thinner.

A new Glass-Seagal and reimposing the old strict capital ratios makes sense, especially when one of Robert's earlier blogs showed that bankers pre collapse weren't doing any better job than they had been for the previous 50 years, they were just increasing leverage and therefore risk to spread the same capital thinner.

Perhaps additional legislation around interest margins and cartel practices, e.g. outlawing things such as the BBA should also be considered, or the existing laws enforced / made enforceable.

Removal of part of the limited liability of bankers and their professional advisers might also curb risk taking and short-termism.

Of course in a global economy, high risk operations relocating to unregulated parts of the world is a possibility, and even if those organisations aren't permitted to deal in most countries, as we have seen, if other organisations do deal with them, the interconnectivity of the financial system, means the risk would be transmitted to more regulated operations and regions.

Perhaps another key element of any way forward is to stop governments basing entire economies on asset price speculation, especially when they are then complicit in trying to drive up those asset prices, creating unsustainable bubbles for short term feel good factors and political gain.

Sad really. I hoped for more substantial change from Obama and Brown. Both don't really dare to reform the most powerful part of their economies, the financial services sector. Sarkozy, at least in his speeches, seems to have grasped the seriousness of the overall picture much better. Of course, banking is politically less powerful in France then it is in the UK or the US.

That's what President Sarkozy said at the UN on Wednesday:
"Hope to those who are paying for errors that they did not make,
Hope to those who are outraged by the behavior of those who still continue to grow indecently rich, after leading the world to the brink of disaster,
Hope to those who fear that, if we do nothing, they will be the victims of ecological and political catastrophes brought
about by the depletion of natural resources and global warming,
Hope to those who are still dying in absurd wars from another age, while humankind has so many challenges to face,
Hope to those whose lives are growing harder and harder, who feel that they have been lied to for so long about the real
state of the world, To all those we owe an answer."

And, for good measure, Sarkozy added:
"We need to eliminate tax havens, all of them. They are hiding places for money derived from speculation and fraud.
We need to curb the price swings of commodities that are subject to excessive speculation, starting with oil, since the
economic, social and human costs of this volatility are unsustainable."

I hope the Franco-German argument wins the day, after the Anglo-American axis (including their servant economists) led the world to the brink of financial Armagedon.
Who wouldn't?

Are there any world leaders who would WANT a photo opportunity with Gordon Brown ?

My understanding is that the 鈥渂anking crisis鈥� was a result of an increasing trading imbalance between especially China and the US/UK. Simply put, Banks in the US/UK eventually had to invent 鈥渁sset鈥� to provide security for the loans we needed to purchase more Chinese goods. China of course was aware that it was funding its exports.
None of the present G20 discussions are addressing the core problems. We need to realise that consumption financed by rising house prices is equivalent to printing money and giving it to house owners to spend.

And so the dross machine stirs itself into action again. All it really needs is tightening and regulation of capital adequacy. And to think that taxpayers (mainly) are funding these G20 jollies, which as JP points out are just the front for decisions made over the phone and in back rooms. These G8 or G20 have always been like this. They are vastly expensive events.

Fudge, Fudge and chocolate fudge.

Nothing has changed and the banks will roll on .

1.Dishing out big bonuses to employees who make big margins on borrowed capital.

2.The tax payer being the fools of last resort when a big bank fails.

3.The banks charging "Penalty fees" for being overdrawn.

4.The banks paying little UK corporation tax and sending profits around the world.

5.The regulators being bystanders to the bankers activities.

If it has not already happened, the UK financial institutions will bring this country to it knees.

John from Hendrix is about right in the analysis and predictions. The compulsion to bail out the banks has in effect underwritten for the foreseeable future all significant risks for the bankers and therefore destroys any justification for their continued market independence. It is supervision not regulation that is needed preferably in a structure where the state and society owns at least some of the main players. The current position of the banking industry is ideal for having a genuine mixed economy in this strategic industrial and commercial function.

Not surprising really given:

a. the continued lobbying power of the banks

b. the fact that most of those who are designing the new system have come from Goldman Sachs, UBS, Morgan Stanley, Merrill Lynch, Barclays, Citi etc etc, and one day want to go back there to earn themselves a retirement fortune (quite apart from still wanting to be invited to their banker friends dinner parties, clubs etc, and not suffer that, you know, social awkwardness thing).

Basel represents the totally discredited 'black box' approach to banking regulation ("I'm afraid you're not allowed to see inside these institutions, only us. But we have a monopoly on wise judgement and we're telling you it's OK and not to worry your pretty little heads about it").

We need the alternative 'open book' approach, meaning three fundamental things:

- a lot more banks, and that means smaller banks and banks doing different things i.e. split up the deposit taking from the casinos (.....this will both increase levels of competition, which have been dismally low, as well as reduce maximum sizes of banks and ensure none are 'too big to fail')
- much higher levels of disclosure forced upon anyone at all that pretends to handle money as the only thing they trade in (this is effectively the 'living will' idea)
- simple leverage ratio limits

"Worst economic and financial crisis" - my left foot.

This is quite simply the worst moral crisis since (invent whatever date suits you), and jolo's "hot air generating machines" insisting on their right to continue with the lack of integrity that exists at "elite" level.

Of course we could sack a few more dinner ladies... Every little helps.

Yes, I am an illegal immigrant, reading the Daily Mail right now, inside my Duck House. As a Tory voter I accept that I am furious that NuLabour "stole" our hidden agenda of greater wealth for the few and replaced it with even greater wealth for a few more and called it global.

I'm jealous they won't let me sit at their table.

If retired politicians were banned from working in financial services say at director level, perhaps the impetus for change might actually result in action. Turkeys do not vote for Xmas!

Has anyone twigged yet that with the shift of economic power to the emerging (is this still an appropriate epiphet?) economies, the capital markets will also over the next couple of decades move Eastwards as well? New York, London and Frankfurt will gradually be replaced by Shanghai, Hong Hong and ? as the locations for the bulk of the world's banking.

Abit worrying that the 大象传媒 doesn't really get economics. On the Today programme this morning, the interviewer asked Ruth Lea why the nation's current account balance really matters. Unbelievable, I am sure most of the beeb journos think that Brown's public 'investment' led growth was the real deal

Why should there be a single leverage multiple for the whole world, anyway?

The important thing is that governments, or central banks on their behalf, should be able be able to limit the lending which they underwrite. It is not merely a matter of common sense that any underwriter should be able to limit the risk to which he is exposed, but the ability to make loans with an absolute guarantee against loss is almost literally a licence to print money. The credit created is functionally virtually equivalent to that created by quantitative easing. The central banks should therefore be able to control it directly.

There is no reason why the UK government should not set up a system within the sterling area independently of what goes on elsewhere. Giving the Monetary Policy Committee, or the Treasury, the power to vary capital ratio requirements for example from time to time, to maintain the health of sterling. It would not matter, if for example, it were easier to raise credit in euros or USD, because to convert such a credit into a sterling credit, it would need to pass through the foreign exchange market and be matched by a transaction going the other way. So no extra net sterling credit would be created.

Banks and other institutions could, if they wished, be allowed to make loans outside such a system. But it would be understood that these loans were not guaranteed by the BOE on the taxpayer's behalf, and there should be full transparency, so that depositors could assess the risks for themselves.

Those who PERSONALLY gain from high risk dealings in the banking sector should also have some personal risk in this - i.e. if they lose (on loans, sub-prime mortgages, etc), then they will personally suffer at least some of the losses (perhaps in the same proportion as their bonuses). Only then will we see some responsibility in how the banks conduct their business.

It's interesting that Canadian banks have more or less bypassed the misfortunes suffered by British and US banks. As I have both British and Canadian citizenship, most of my savings are currently in Canada, where I feel they are a lot safer than in the UK right now. Perhaps we can all learn from the Canadians (and I believe the Australians, who also had a more sensible banking regime).

I think setting a multiple for lending to capital ratios is extremely positive...if it happens, and provided there are no caveats.

If lending ability is finite and proportionate (albeit flexible depending on ability to increase capital) then it would logically follow that there is an incentive to increase the quality of lending on that specific bank's books. It follows that the risk to the taxpayer should be mitigated, though never extinguished.

However, life is never this simple and the industry is full of bright sparks who are clever at designing new products with more skill than an alcamist's apprentice- see CDO's for example. I can already envisage one banking institution 'selling' their lending power (or percentages thereof) to other institutions for higher 'guaranteed' returns (unachievable and risky 'sub prime' actually 'high risk' loans), and insuring themselves against any potential loss. That may not be technically possible, forgive my feeble attempts- but you get the jist.

The point is that supervisory regulation has got to be far far tighter- the 'checks and balances' between the treasury, FSA and BofE are all over the place. Clear responsibility, rapid response and significant penal powers against lending institutions and crucially Directors in their personal capacity. 'Light touch' but with a significant bite they aren't afraid to use rather than light touch with a whimper- it doesn't wash.

#15 - nottoonear

I think you are spot on. The crisis is first and foremost moral. Which of course may have interesting repercussions at the economic and political levels, because the behaviour of the average Joe is going to be increasingly difficult to predict. In any case, rough time ahead for the self-proclaimed elites.

Jolo13 @ #1

The point of all these get-togethers, as you put it, is to increase global warming while giving citizens of the World the impression that SOMETHING is being done. On an individual level, the point is to help attendees feel more self-important. Much focus in this country is on how Mr Brown is trying to grab some air-time; other leaders are scrabbling like him to get into the front row in photos. But they've gone to the USA to do it. But don't forget that Mr Peston and Ms Flanders are out there, huffing and puffing with their leaders. And the anti-globalization, climate-protecting protesters are there too, forming a globalized front against governments, and creating their own massive carbon footprints.

This is a circus. Every big town wants to host it some time, as it is a big money-spinner. Huge air fare bills; massive limousine bills, colossal hotel and meal bills. And then the conference centres...

My employer has stopped paying for most international travel. We use web conferencing now. And email. I can communicate everything from my desk. I miss face-to-face contact with colleagues and customers, as it is a nicer way of dealing with people. But note: it is nicer, not essential. I could work from home instead, but I think working face-to-face with some of my colleagues is essential, or we are not a company.

Who has the biggest carbon footprint in the World? Apart from air crew? My guess is that it is someone like Tony Blair. These self-important people are burning up our grandchildren's share of carbon and oxygen. Their behaviour is immoral, but they dress it up as do-gooding. The way to recognise one of these carbon-thieves is to study the background when they are on camera: Is Bono or Geldof in Ireland? No? then he must have jetted somewhere to do his grandstanding. Is Tony Blair in one of his houses or offices in London or the home counties? No, then he's flown somewhere. Is Gordon Brown in London? Paris? New York? Pittsburgh? Is that where he was yesterday or last week? Then he's flown there, with about a hundred hangers-on. And don't get me started on "green" people's holiday plans.

These people disgust me.

17

Its already well underway - Cheif Exec of HSBC has just relocated from London to Hong Kong (

I think this is a political statement as much as anything else - probably related to the government interference. When there was talk of the 'talent' leaving the city and relocating is this the sort of move that was meant?

I've lost track of the point of all this!

Has the gov ever considered starting from the point of assessing what level indebtedness it wants the people it was elected to represent to have - both business a domestic. Rather than how much a bank can lend as a proportion of the variable value of assets it holds at any given time.

So ask not if Banks should be able to lend multiples of 20 or 25, but rather do you want the population, in general, to be owing at multiples of 20 to 25

Then reverse engineer the solution 鈥� try it, some of the actions are obvious, some will be hard to swallow but in the long run we get away from working just to repay debt.... and maybe we get out of the fear of scaling back debt and the consequences it will have on the economy!

I am amazed that a gov that could obviously see the growth in debt management companies, couldn鈥檛 work out that maybe debt was a problem not a solution鈥�.

Remember saving for retirement is workable in the long term鈥�. Speculating for retirement, by definition, can only benefit the few!

23

Actually face to face meetings with your employees and collegues are not essential - I work in a global organisation that is managed from various places and is "loosely and virtually connected" - we all get on pretty well using technology such as Skype, video conferencing and email.

In terms of Carbon footprint as you mention - look out of the window between 8 and 9 every morning and see the constant queues of cars (esp the M25 from previous experience). This is a massive source of CO2 emmissions that could quite easily be cut down - unless you have a need to be in a physical local for work (eg manual, nursing/care etc) then there really is no need for a lot of offices/commutes - especially with the move to the 'cloud' for a lot of things for clerical style roles

Robert, unles the agreement stops banks using off shore centres to wash through business they can 'legally'circumvent any new basket of regulations this jolly will be all hype and no change.

The difference is this time where before Basel was a private members club, now the man in the street will be looking with hawk eyes at the minutae of detail and will soon see if the politicians have produced another white wash or not.

Hoepfully you and the 大象传媒 will too!.

Robert, you would appear to be trying to make this blog redundant at these glorified wing-dings every time they take place.

I bet you're planning extended holidays during all future gatherings of the G-8, G-20, groups of finance ministers, foreign ministers, heads of state and the like.

All can be covered by your universal one-liner:
"There will of course be a fudged agreement before the day is done."

Trust me; post that again just before the next one, then have a week off, and you'll miss absolutely nothing !

"It's a big thing that the rich nations of North America and Europe will formally acknowledge that they no longer have a monopoly of wisdom on what's good for the global economy."

I like this - it sounds as if the rich are behaving democratic and getting the not-so-rich on board, covering themselves in glory. Truth is, power has moved away, that countries like Brazil, India, China are calling the shots and have effectively seized power; yet the West has to talk so condescendingly.

I hope that one day the G20 will become the G12 - with the current G8 consigned to the dustbin of history. That will finally close the chapter on colonialism.

Robert Peston's analysis on the IMF issue would be illuminating. The "demands" for seats by the BRIC group could be a little premature as (I may be wrong) I don't think they supply much in the way of cash to assist penniless countries. In fact I wonder what they even give to charities in comparison to the West as a whole.

To say that they deserve seats because of the size of their economies might well be true but it seems to me that none of them are in the G6 because of the size of their economies. Therefore what rating is the fairest for membership?

What's the mandate of the G20 - the website says

' The G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.'

Dont expect too much of it, then.

Its driven by fora of finance ministers and central bank governors - why should these narrow interests be driving policy for all? Put aside the fact that it is a talking shop, how does it account to us for its work?

I agree with # 21. However I don't agree with Robert Peston's glib proposed solutions: I would find it easier to believe in his 'simple, hard-to-dodge' rules if I had a better sense of what they were. But I'm not sure he knows what they are either. A leverage ratio is a simple new rule, and as an additional requirement is going to help matters, but Robert seems to want something more wholesale and different. This is a highly complex, inter-linked, confidence-sensitive industry, and I believe that any new rules or separations he proposes are soon going to be circumvented by the clever chaps at Goldman Sachs, who have already switched from being an investment bank to a bank holding company and have not changed their behaviour one iota. What the sector needs is aggressive combative regulation and people who are not afraid to say some hard truths and frighten the horses a bit, but also are grounded in realism and detail. We need more Lord Turners and Vince Cables, in my opinion.

I've tried to follow the economic crisis and agree with much of the cynicism. But I can't find the answer to one question. The main trigger was that banks like RBS bought packages of dud mortgages.

Now bankers may be a tad on the greedy side at times, but they are not daft, so someone somewhere packaged these duds and said presumably that they were good low-risk investments. They said it convincingly enough to persuade RBS and others to buy them.

So who was responsible for this misrepresentation? Are they beyond the law? If not, can the dosh be recovered? It just seems to have been written off in a way that just doesn't apply to any other area of life.

It will be a "big thing," if it comes to pass that the G20 acts as a force for Good rather than a force for Greed. If it turns out to be the latter it will have been a Horrendous Thing, not a Big Thing.

The new entrants presumably all have economic growth firmly at the front of their agenda's. The West spent some (much?) of their rewards of economic growth on health and education. I'm not sure if those new entrants to this club have similarly altruistic intentions towards their own populations. The squalid poverty, still, in much of India is a particularly awkward example of this for people who believe in the new, economically strong, India.

Our elites like to rein in poor human behaviour by passing laws backed with tough sanctions against those who break them. Dishonesty, is particularly frowned upon. However, I would argue that Greed is a worse form of behaviour than dishonesty. In fact greed won't be far away when dishonesty is discovered. Weren't our bankers guilty of greed, (for pursuing persistent profit growth "at all costs?") What chance the G20 seeing this and agreeing the need to limit the extent to which greed is allowed to affect economic growth in future?

On the comprehensive "Love of Money" that is showing on the crash Alistair Darling stressed the need to have people in charge of banks who understood the business. Hence they would know they had liquidity and capital problems and not just the former.

In my simple world finance is like a Rubic cube where one square is the real money. There are all kinds of instruments driven off it that make up the overall cube.

In my world its fine to let capitalist drives earn us money.

But if the value of the cube - involving CDS and so on - is actually far greater than the real money in the world then finance must be harnessed so it can be a willing horse but doesn't take us off a cliff. In other words if somebody gets their sums wrong its curtains for an interdependent world.

Therefore, to me, bonuses are distasteful but change little.

There has to be greater control and understanding of the derivatives that undermined the system.

So its important to have bankers who know their business.

Its also important to have a chancellor who does not wake up one morning, read the paper, and say "Cor blimey the biggest economic catastrophe since the Wall St Crash". They had no warning and still have little reason to think they would get a warning in the future.

Surely that means if instruments are too complex or just too risky they have to be banned and there have to be standards on risk analysis so that we know all of the big banks are singing from the same hymn sheet.

Robert

I think someboby else mentioned hot air already.

Re the current economic situation. I'm sure this could all be done much less expensively by e mail. After all most of the rest of us in the developed world know it is the most cost efficient way to communicate with the great cc option and even bcc option available as well as the reply to all button.

Still there's nothing like a great expensive bash at someone elses conference centre, you get to take all your advisors, cronies, security guards etc. I wonder just how much this is costing us ? Hundreds of thousands probably or more.

Really if they have to be able to see each other how about video conferencing. Anyway the photos no problem with todays tachnology, it could be pasted and then just issued (or how about they use the last one and change the background).

Personally I think Britain should resign from this particular club as a cost saving measure and concentrate on more important problems at home absolutely nothing gets sorted out at these meetings.

"It will be a supplementary measure, which will gradually be migrated into Pillar One, subject to negotiation on its level: is a safe bank one that lends 20 times it capital, or 25 times?"

The notion that safety is that the art of the issue. A bank is not safe at a multiple of 25 times earnings and unsafe at a multiple of 30 times earnings. Neither is a bank safe in a multiple of 20 times earnings and unsafe a multiple of 25 times.

The banking system, obviously, is built upon the notion of leverage. That's the way it works. If we impose high reserve requirements we limit the amount of borrowing by banks and reduce the potential growth that might result from that lending. However, we increase the stability of our economy.

No system of regulation can deal with every possible contingency, such as the one we are now facing. There are positive feedback loops in the economy which magnify the effect of changes and no amount of regulation can remove them. However, we can introduce some negative feedback loops through the use of social welfare programs, which automatically increase government spending when a weak economy would otherwise reduce the spending in the rest of the economy. We can pre-engineer in pre-approve infrastructure programs so that they are ready to go on shorter notice. We can cut back on government spending during the good times and increased government spending during the bad times.

Politicians actually seem to work in a way that reinforces economic cycles, rather than dampens them. They increase spending when revenues are strong, and cut back on spending when revenues are weak. The action by central governments would seem to put the lie to this because of the stimulus spending, but much of that stimulus is being offset by reductions in spending by local governments.

To place the majority of emphasis on regulations will not work, or will not work without an unacceptable decrease in real economic growth.

The all out rush of governments to support their banks does of course have a further consequence.
Those banks are now supporting property developers etc that would otherwise have gone belly up.
Neelie Kroes needs to look beyond the banks when she is tasked with looking at anti competitive practises.
The bailed out banks will not want to see more toxic debt on their books so they will support these large companies secure in the knowledge that they have the backing of their governments.
How so? The governments will not want their banks to be landed with more toxic debt either. So the busted property developers etc will just carry on.

So it is not just the banks that have been bailed out by the taxpayers it is the people that got the banks into trouble in the first place that have been bailed out. Good old taxpayers.

This scenario rather overshadows the distinction between public and private finance.
The privateers are being funded by the taxpayers! Weird or what.
Not only that but the anti-competitive checks normally restraining public companies will not apply to the new super funded companies.
They will be able to take all kinds of risks, compete against all-comers.

All secure in the knowledge that they are private companies funded by banks funded by taxpayers and allowed to do anything they want.

Who is there to stop them?
How could anyone compete against them?
I can just see someone trying to get funding from a bank that is backing one of their competitors..

Banker Bonus -

Simple - as the tax payer has picked up the bill - then whatever total bonus a banks pays to its staff/partners is also paid to the tax payer. If it cant afford it then call in the receiver or limit the bonuses.

Make it a law.

#38 Star Trekker

The growth sought and achieved previously was not real growth, but created via a bubble of inflated assets and debt- a restriction in that type of growth can't be a bad thing, can it?

Whatever happened to organic growth? A bank being linked to growth in the real economy? How often do we see and hear at the moment of the SME's who can't get finance though their business is sound, and yet QE has re capitalised the banks? If one of the effects of the restrictions is to restrict paper growth but to incentivise real growth I can't see how that is a bad thing.

The banks should want to help SME's to grow, to assist them in that process, sure- so that they can make more money, but the point is that the incentive to recklessly lend is restricted as they have finite lending power/ability.

The tricky part is to make sure that the ratio is at a level where there is enough fairly priced credit available, the fear/problem being that in boom years the ratio would simply be increased to ensure that there is cheap credit available, and low/poor/difficult analysis as to risk.

Regardless as to the amount of leverage there is risk in the deal/loan- and risk is almost impossible to assess regardless of what they say, see the ratings of Icelandic banks 6months before going under (all rated at the highest level). The benefit to the taxpayer is that there isn't a bottomless pit.

We could have a very detailed, well-reasoned & articulate document -- and if there was a failure of Will to actually implement changes it would amount to no change at all.

Or we may wind up with a rather vague, unremarkable, unexciting document -- and the Will to Change may make it a huge success.

As Lord Turner rather brilliantly reminded the other day, "When it comes to Banking, there is Nothing at all wrong with Boring."

Will will make the difference. How much have we learned? How willing is the global financial leadership to work hard -- or retire and resign?

Remember that old ad slogan for (can't remember if it was Bank of Boston or Bank of Scotland?): "We make our money the old-fashioned way: we earn it" -- not sure at all if i have it right: well, words to that effect would make a very nice motto for this G20, and its outcomes.

The biggest reforms needed are in HR: recruiting, hiring, training perhaps timid, dull, "unsexy" -- yes, even Boring souls -- with a predilection for scrupulous forthrightness and an aversion to risk-taking, sweet-talking and seduction (not to mention casuistry and connivance).

Yes, such people exist, and some would enjoy working in banks. So hire them instead. Give them some authority, too.

Such a decision would not be reflected in any document. it would have to be a shared commitment across the board at the highest offices & corridors on the planet. But it could have a remarkable effect, without anyone expecting it to.

Last i heard, there were quite a few people out of work.

Changes are made by people who are given permission to do things a better way, if they can think of one.

Regarding Invisiblehandadvisor's quote from the French president - can we therefore have Sarkozy as our next PM please? He at least seems to have a grasp on the real issues, even if he's not too effective at tackling them. Whereas most British politicians seem to live in a fantasy world in which the only important issue is who wins the next election...

Is a safe bank one that lends 20 times it capital, or 25 times?

Looking around the world at banks that appear to have been totally unaffected by the crunch, they appear to be those who lend at 1 times their capital.

Fractional reserve lending seems to be a dangerous business.

As far as I am concerned the G20 is an irrelevance - just a chance for world leaders to promote themselves.

Hardly surprisingly they have decided to continue the fiscal stimulus - i.e. spend tomorrows money today to keep the show on the road. In Gordon Brown's case this is essential with the election coming up.

However, I believe they may all get overtaken by events. We are beginning to see the equity bubble of the last 6 months come to an end, and the major currencies are looking more and more unstable - hardly surprising since they are backed by nothing but thin air.

The fact that nobody has done anything about the bank bonuses should not be so surprising, given the close links between the politicians and the bankers.

Here again, the politicians may get overtaken by events. Once the government becomes no longer able to clothe and feed its citizens the people will take their own revenge.

The only action that would have prevented another meltdown at the banks was the re-introduction of the Glass-Steagall act. This was not done because America and Britain are so reliant on taxes from their financial sectors that they want the madness to re-start as quickly as possible, for Gordon Brown and his re-election chances quick isn't quick enough.

The repeal of this act allowed bankers to access the monies of the risk averse saver deposited in every High St and Main St account, these people chose to avoid risk and settle for a modest but steady interest return on their savings, knowing full well that the banks used this money for the social activity of lending it on at a slightly higher rate to local businesses guaranteeing their continued success and a modest return to the banks profits.

Once Glass-Steagall was gone so was the protection, the banks then pillaged each and every one of these accounts against the express desire of the rightful owners of the monies and used it in casino activities buying up products that Warren Buffet had described as "weapons of financial destruction". This frenzy produced no social benefit, just bonuses for the bankers and increased taxes to Governments.

This is the madness which is soon to return, might take a few years before the bubble bursts again but, the inaction at this weeks G20 has assured the bubble is already being inflated.

Not sure why there is so much reticence involved in curbing the bonus culture of banks. It's quite simple, if the whole world disapproves and takes action (i.e. the G20) then the original fears of bankers leaving to work in unregulated countries are unfounded. It may stifle investment "creativity" for the greedy few but who cares if, at the same time, it brings guaranteed stability for the vast majority who rely upon sensible investments as current and future income. We need more regulation otherwise we will see yet more boom-bust activity in the next 10 years!

We read again RP's belief that 'wholesale replacement of the Basel rules...which created the perverse incentives for banks to take the crazy risks which hobbled the global economy' is required. How wrong.

When will he, Adair Turner and others who have the potential to bring about change to the way banks behave realise that the root cause of the problems is that Banks management have no idea what is going on within their banks. The banks have no idea what their total exposures were last month let alone today or tomorrow.

The responsibilty - and they should be legally forced to accept it - rests with Mangement and Board Directors to evidence actual risk daily - not from spreadsheet lies but from systems that tell the truth. Without access to reality they are not fit for purpose.

Basel 1 & II are fine - IF the banks can evidence their risk and actual capital requirements rather than ignorant and irresponsible management accepting guestimates of risk and capital adequacy calculations created in spreadsheets.

Where was Africa is the seem of things? So how can it be global its all rubbish its over infatuated ego trips so the masses can see that this group of men and very few women rule the world the fact that you would not buy a use car of any of them is near here nor there. To me they look like a line up of Crime watch sorry the endless drivel about fixing the banks and the clap trap that they can fix it like Bob the builder made me turn over and watch a soap more real. The USA did the deed and we still follow them because they have a President in colour who is easy on the eye. I am amazed he has lived so long the Israeli Govenment come in and says what it wants and they all kowtow.

The money is in the bank its all about making new money for the USA like the EU so that they can dump worthless dollars on the Chinese and other brown faced countries and damage their economy. Bush has done it before and Barak can do nothing as the neo cons still rule for the very rich the trillionaires. Democracy does not work for the rich or socialism they can not have power the few over the many. That is why if voting made any difference it would be band that is why we have two parties and a third to back the one that wins and we have 600 and odd PMs and many more civil servants and its why there is an new layer of poor and the unseen. Baroness Scotland should have paid 拢10,000 and she knows it the smile on her face said it all, one law for them and the other for us the unpeople.

The thieves and fools who caused the mess and stole from our economic house have been given authority to repair the locks, and a key to return when they feel like it. Tax payers now have to pay excessive insurance for this flawed system. Nothing will change while banks can do legal forgery and create new money as debt, not backed by an existing deposit. New money should be created by the government by spending it into circulation in a controlled way to allow for new business and population growth. Banks could still lend, but not more than the total of deposits within the banking system. 3% of money now is notes and coins, the remaining 97% is bank created debt money. The only way at present to pay existing debts plus interest is to create yet more new debt money and debtors to go with it, which becomes impossible when a mathematical limit is reached. That point has now been reached and that is why we have had a mega boom followed by the bust.