While France and Germany could stand to invest more in stimulus plans, they're also not wrong about global regulation. The banks have played one country against another for far too long and coordinating an approach around the world is a good idea. It's still unclear why Obama is so against this, other than the possibility that he continues to buy into the know-it-all Summers, who must be against it. London and New York remain the global financial capitals, and that probably has a lot to do with this as well. If there were more confidence in Geithner leading the US regulation, a global regulator would be less interesting. At a very minimum, we need a lot more coordination across borders with regulating banks.
Despite calls for unity from Mr. Obama and the British prime minister, Gordon Brown, the host of the Group of 20 meeting that will formally begin Thursday, a rift intensified over Anglo-American calls for greater fiscal stimulus spending and French and German demands for more intrusive global regulation of financial institutions.
While President Nicolas Sarkozy of France did not repeat an earlier threat to walk out of the conference — “I just got here,” he joked — he made it clear he would reject an agreement that puts off stringent new regulations on banks, tax havens, and hedge funds.
“The decisions need to be taken now, today and tomorrow,” he said. “This has nothing to do with ego. This has nothing to do with temper tantrums. When it comes to historic moments, you can’t circumvent them.”
