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G20 Concludes with More Lofty Goals—Creating More Skeptics of International Harmonization of Regulatory Reform
By Nik Venema | September 6, 2013

The G20 Summit in Russia ended Friday Sep 6, with world leaders claiming to have found some common ground in calling for “better” reforms to the global derivatives market. Until recently, there was just a glimmer of hope for US-EU cooperation, given the US’ foreign banking rules causing much uproar and dissent in the past few weeks on both sides of the border. At G20, leaders on both sides announced their good intentions, to be sure. Yet the concrete steps needed to see the framework through—and to hold regulators and participants accountable—remain elusive.

The “planned banking union” is quite a challenge for a fragmented Europe, governed by different reporting rules depending on the jurisdictions. Another challenge ahead is implementation of substituted compliance, a policy which would likely benefit countries that are not part of the G20, like Singapore and Australia.

The conclusion of the G20 summit did not end without asking the Financial Stability Board to create proposals by the end of next year to equip top banks with enough bonds, so as to not burden taxpayers. With all of these regulations upon regulations, and proposals upon proposals, one cannot help but ask whether or not these band-aids are really enough? Is a schedule of rules honestly the first step to regulating “shadow banking?” Or is this more smoke and mirrors, since participants have been encouraged to find loopholes in the meantime?

Blog post and comment inspired by Huw Jones’ article at