Rebuilding financial confidence
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This Friday and Saturday, the G20 finance ministers and central bank governors will convene in Paris focused on fixing the global economic system.
On Monday, French Finance Minister Christine Lagarde repeated that the overriding goal of the meeting was to create the conditions for "solid, balanced and sustainable growth" for the world economy.
This two-day meeting is designed to be a watershed for the world's financial system and China is expected by many to play a key pro-active role in reconstructing the global financial architecture.
After five summits since November 2008, as they shuttled back and forth to address the immediate effects of the global financial crisis, the world leaders finally decided that the financial crisis had eased enough that they could decrease the frequency of their meetings. This year the G20 leaders will meet only once in Cannes, France, in November.
Before that summit, the finance ministers and central bank governors are expected to define the economic indicators of global imbalance at this week's meeting and remodel the current US dollar-dominated international monetary system, both of which are regarded as root causes of the financial crisis during the previous two years.
Meanwhile, reducing the excessive volatility of raw materials, implementing seamless financial regulation and assisting development are the main goals of the French G20 presidency's agenda.
France wants not only trade and current account balances, but also growth differentials and the accumulation of foreign exchange reserves to be the indicators of global imbalances.
It is still not clear what kind of indicator system will finally be adopted to monitor the global economy, but if the indicators work as a reference system to guide an individual country's economic development, it is rational and acceptable. If the G20 is planning to churn out a set of binding indicators and ceilings to regulate individual economies, then it will in all probability be meaningless, as enforcement will be a huge problem.
