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the finance ministers and central bankers of the country’s twenty group (G20), which represents 85% of the economy of the planet, gave themselves appointment from Friday 26 February at Shanghai (China). They will be looking for two days on the world economic situation, the volatility and vulnerability of markets, but also identify priorities they want addressed by the Summit of Heads of State and Government of 4 and 5 September in Hangzhou. Review of records that will be on the table.
Is the world on the eve of a major new crisis?
If financial turmoil has subsided for now, the state of the global economy continues to cause concern. The World Bank and the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) has just introduced gloomy forecast, once again revised downwards. Global growth would remain in 2016 to its 2015 level (+ 3%), which was the lowest in the last five years, and the financial risks remain substantial
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that’s enough to feed some discussion in Shanghai where representatives of the nineteen G20 countries – advanced and emerging economies – and the European Union (EU) should express their feelings and their analyzes. And say they are satisfied, as the major economic institutions, that the world is not on the brink of another major crisis like the one of 2008.
For despite turbulence financial and rising among investors in recent months, an aversion to emerging risks which are accompanied by impressive capital outflows, the World Bank, IMF and OECD consider most protected countries in 2008 and most capitalized banks.
the risks are not, in their view, the same level as at the time of the bankruptcy of US investment bank Lehman Brothers. The question is whether the G20 members share this view.
China is she able to reassure its partners?
The Chinese host will be challenged to reassure. There are two years, obtaining G20 sounded like a recognition of the maturity of the People’s Republic economy despite the slowdown in growth, the stock market soared, taking the yuan value. As for the duo President Xi Jinping and Premier Li Keqiang, he seemed determined to carry out ambitious reforms.
Since then, the Chinese stock markets fell, the Chinese currency down and the authorities seem too occupied to manage daily affairs to engage the promised reforms. The slower, rougher than expected, has given rise to serious industrial overcapacity, especially in metallurgy, who cringe Europe and the US fear for their own industry.
But it is primarily Chinese monetary policy concern. Since 2015, depreciation and interventions to support the yuan have succeeded without knowing whether or not China had liberalize its currency, as announced to enter the IMF basket of currencies. It has also called on Beijing to more clearly communicate its monetary choices
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several countries, including emerging, prepare to argue for a rebalancing of economic policy ( “policy mix” ) and a greater use fiscal expansion to support growth and invest. Monetary policies have reached their limits and they cause undesired side effects particularly on the exchange
China, which chairs the G20 for the second time, knows something. she has issues of international financial architecture one of its priorities. The persistent weakness of investment and trade should also generate lively debate.
The “net” financial safety-sufficient?
the question of global financial safety nets should be widely debated, whether those qu’apportent states when properly managed or regional arrangements such as European stability mechanism (ESM).
in this context, the initiative Chiang Mai concluded with the ten countries of the Association of Southeast Asian Nations (ASEAN), Japan, Korea South China and spent the expensive possibility emerging of currency swap agreements – currency trading generally between central banks – in case of lack of liquidity
the question of the IMF, its size. , the instruments available to it – are they well suited to the needs of the hour? – Crisis prevention tools and capital controls should also be mentioned as Christine Lagarde, chosen unanimously on February 19 by the Fund’s Board of Directors for a second term, has repeatedly said the IMF was ready to provide emergency assistance to new countries – including emerging -. in big trouble
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Will also mentioned the work throughout the course of the G20. They relate to financial regulation – the “TLAC” or “ratio of loss absorption capacity” imposed by the Financial Stability Board to systemically important banks, market infrastructure and clearing houses
<. p> They also cover structural reforms and international tax – the project “BEPS” OECD is intended to combat the erosion of tax bases and the multinational profit transfers
the fight. against terrorist financing and after COP21, the climate issue – the G20 is very interested in the assessment of climate risks in the portfolios of financial institutions – are also on the menu of the meeting in Shanghai
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