There is a need for a new financial architecture that includes new regulatory framework with more representation from newer economies in addition to the G-7. This would make the body more representative and put forward the realities of the new economics.
Not much was expected out of the G20 summit other than a beginning for what some have termed as Bretton Woods II. Most leaders stressed the fact that the financial crisis, which started in the USA:
- has now gone global
- choked normal credit channels
- triggered a worldwide collapse in stock markets
- started to affect the real economy
- has affected most industrialized countries, which have gone or are going into recession with no sign or early recovery
- has started to show signs of the Great Depression
All measures should be taken at the national level to complement any coordinated international stimulus. The international community needs to consider special initiatives to counter the shrinkage of capital flows to developing countries that is almost certain to occur over the next two years.
(Salient features of the speech made by Indian Prime Minister ManMohan Singh at the G20)
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