G-20 agrees to regulatory crackdown

The much awaited G-20 came and went by. There were lots of apprehensions that the divide between U.S.A and the EU on the methodology of economic stimulus may derail the Summit. However, saner sense prevailed and with a lot of behind the scene activity and persuasion, an effective agreement was dished out.

The world leaders agreed on stricter limits on Hedge funds, Executive pay, credit-rating companies and risk taking banks. They also bolstered IMF and offered cash to revitalize trade to help governments tide over the economic turmoil. More than $ 1 trillion was pledged in emergency aid to cushion the global economic debacle. This is apart from the $5 trillion already planned by nations as stimulus package till 2010.

The rules of capitalism are being rewritten where governance and regulation are the watch words rather than blind speculation and non-transparency. Tax haven nations might be a thing of the past or they have to be transparent in providing information. The G-20 have vowed to” name and shame” nations resorting to protectionism.

One hopes that with these measures and much more to follow in the months to come, the economy will slowly but steadily limp back to normal at least in 2010. Free market per se is welcome. However, greed coupled with pure speculation and irrational exuberance is a sure recipe for disaster. People seem to have realized this now and it is fondly hoped that the mistakes committed by the developed world is not repeated again.