The Economic Crisis Brings World Leaders To Washington
Friday, November 14, 2008PAUL KANGAS: World leaders are in Washington tonight to talk about ways to solve the global financial crisis. The weekend summit hosted by President Bush will include the heads of the G20, the 20 biggest industrial nations. It's being hailed as the most significant gathering since World War II. Washington bureau chief Darren Gersh has a preview of this historic event.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: As exciting as it is to see world leaders arrive at the White House with pomp and military ceremony, the work of rewriting global financial regulations is always boring, hard and long, especially when, as economist Ralph Bryant points out, the world leaders assessing the crisis are not all in agreement.
RALPH BRYANT, SENIOR FELLOW, BROOKINGS: Everybody I think to some degree recognizes that we had inadequate regulation and supervision of financial institutions in almost all countries and we need to do better about that. But just exactly what to do, there's no consensus about that at all yet.
GERSH: Which helps explain why President Bush was toning down expectations in his weekly radio address.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: During this summit, I will work with other leaders to establish principles for reform, such as making markets more transparent and ensuring that markets, firms and financial products are properly regulated.
GERSH: That is less than some European leaders want. But given the president's lame duck status, principles may be the best the leaders of the G-20 nations can do this weekend. Though economist Simon Johnson says some world leaders may try to do more.
SIMON JOHNSON, SR. FELLOW, PETERSON INSTITUTE ON INTERNATIONAL ECONOMICS: This leaves a bit of a vacuum. Who's going to fill the vacuum? Well, the Chinese may have some ideas. Certainly their big fiscal stimulus is pointing in that direction. The French certainly have ideas. The British also have ideas.
GERSH: The British are pressing for an international college of supervisors that would oversee the world's largest banks. The White House says it has supported that idea in the past, but the college could be redundant, since other international institutions already play a similar role. Whatever the leaders endorse, the ultimate goal of this summit Johnson says is to be seen as doing something that boosts confidence.
JOHNSON: You don't really want to disappoint everyone on all dimensions. It's good if you can say, yes we met and we delivered something. What's the something? We don't quite know yet. It makes this summit rather interesting.
GERSH: Another possibility, countries could use the summit as a platform to announce fiscal stimulus plans. If enough act, it could give consumers and markets a small injection of confidence. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
