World leaders might increase IMF funding
LONDON Global leaders made headway today on tackling the world's worst financial crisis since the 1930s, with possible deals to give more money to the International Monetary Fund and clamp down on tax havens and freewheeling hedge funds.
A British official said the Group of 20 rich and developing countries would likely approve giving more than $500 billion to the IMF so it can increase its loans to governments struggling because of the financial crisis. The official spoke on condition of anonymity because talks were ongoing.
Two other people close to the negotiations said France and Germany had persuaded the Group of 20 leaders to back tougher language in the final statement on stronger financial regulations to avoid a repeat of the current crisis. They refused to be further identified because they were not authorized to speak to the media while talks continued.
Opening the summit in London's east Docklands district, British Prime Minister Gordon Brown said there was strong unity among leaders upon the need for action.
"I believe that the text that has been circulated already reflects a very high degree of consensus and agreement between all of us," Brown told his fellow leaders.
A draft communique, however, suggested details still needed to be firmed up.
Britain's Finance Secretary Stephen Timms said early discussions had been "lively," but added countries would agree on sanctions against countries who refuse to sign up to new rules on regulating tax havens.
"The era of banking secrecy is over," Timms said.
As President Barack Obama and Brown joined other leaders at a working breakfast, 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 positions as well, ringing the stock exchange.French daredevil Alain Robert scaled Lloyds of London's high-rise headquarters as office workers below snapped photos. Robert, dubbed the French spider-man, has scaled dozens of tall structures around the world without ropes or harnesses to draw attention to global warming. He was later led away by police.French President Nicolas Sarkozy and German Chancellor Angela Merkel have been adamant that the G-20 meeting must take concrete steps to more closely regulate banks, hedge funds and other financial institutions.Sarkozy had previously threatened to walk out if the summit didn't achieve a strong statement on new financial regulations, warning he considered action on tax havens, hedge funds and ratings agencies as the absolute minimum the negotiations must resolve.Sarkozy and Merkel want the G-20 to publish a blacklist of tax havens and announce sanctions at the end of today's meeting.The summit also will 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.The British official said the boost to the IMF would include significant pledges from China, and in return there would be increasing efforts to give China and other emerging countries greater clout on the IMF.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 acknowledged U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying "we can only meet this challenge together."European leaders have balked at moving beyond spending measures already announced, arguing their more generous welfare systems mean their spending levels will rise anyway as more people get benefits such as unemployment insurance.
