Christian Schoder's blog

The G20 summit in Pittsburgh has ended. A basic consensus has been found regarding management salaries, strengthening of the IMF and increasing the capital buffers of banks. Will this package of measures be enough to fulfil the promise of the G20 to avoid future crises? To ask that in another way: If the package had been wrapped up five years ago, would it have been able to prevent the real estate crisis of 2007/2008?

The half hearted effort to limit management pay is a symbolic if not indeed a populist act. Would the bankers at lower pay levels really have distributed fewer housing credits?

The strengthening of the IMF seems cynical. This was the institution that had demanded the liberalisation of capital markets. If the budget of the IMF had been tripled five years ago, 5% of the voting right given to China and an explanation given to it that the freedom of capital markets was not quite that easy a matter, would that have prevented the crisis?

Taking the train westwards now are Agnes (sitting next to me also writing her first blog) and I, finally going to Pittsburgh. The “Big Apple” behind us, out into the countryside, so to say.

Nine hours in a train for just 500 kilometre is somewhat exaggerated but has a good side to it: it provides sufficient time to study the official statements of the G20 about the announced financial markets’ reforms. At last the future finance architecture might be a topic at the summit, given that the discussion of management’s salaries leaves some space for that.

Thoese who read statements like these know that poets are at work here: "The challenges posed by the crisis have highlighted the need to improve our multilateral cooperation in order to further promote global financial stability, foster sustainable development and lift the lives of the poorest from poverty." is my favourite line from a letter coming from Washington to the rest of the world.