G20 ministers set to boost anti-crisis measures
G20 finance ministers, meeting in Paris on Saturday, are to call for a capital surcharge on top banks to avoid future state bailouts. A final communiqué to go to the 3-4 November heads of state meeting in Cannes calls for a surcharge of up to 2.5 per cent to be phased in from 2016.
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The measure, according to a leak to the Reuters news agency, would affect banks such as Goldman Sachs, HSBC, Deutsche Bank and JPMorgan Chase.
The aim is to make sure they have enough capital to withstand market turbulence so that taxpayers won't have to rescue them when crisis hits again.
Finance ministers and central bankers from the group of top economies met in Paris Friday and Saturday to try to hammer out ways to stop the world economy slumping into recession.
They met as worldwide anti-austerity protests took place, with a huge turnout and some violence in Rome and scuffles with police in London.
The ministers were also expected to press China to move towards making its currency convertible and boost domestic demand.
The final statement, which would be agreed at the Cannes meeting, is also expected to make sure that the International Monetary Fund has enough resources to prevent Europe’s debt crisis spreading.
Developing countries favour the measure but Germany is hesitant to commit itself and the US opposes it.
US President Barack Obama called German Chancellor Angela Merkel on Friday to discuss the crisis, telling her that they “should stay in contact” ahead of the Cannes summit.
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