Wednesday, November 19, 2008

Back to the Financial Crisis: Beijing vs. Brussels Rules

Pirates are the fun story of the day--and I've been enjoying my commentary on the situation. But I wanted to go back to the global financial crisis and the "let's agree to talk again" G-20 summit in Washington over the weekend. Obviously the outcome was not the "reinvention of the international financial system" envisaged by French President Nicolas Sarkozy and the European Union.

And a clear divide was present. I characterized this in my contribution to the Stanley Foundation report on global leadership as the tension between the Brussels view of the world--increased transnational regulation--versus the Beijing approach--limited compacts among sovereign states. When it comes to the issue of "supervision" of the financial system, it is not surprising that Washington is leaning much more in the Beijing direction on this issue, at least for now.

Will that change under an Obama Administration? Does the pendulum swing towards the Brussels approach? Specific proposals are due on March 31 in advance of the follow-up G-20 meeting.

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