G-20 conference statements reinforces chances of future economic recovery

Also, G-20 and associated conference agendas increasingly focus on relatively specific policy concerns, some of which are very arcane in nature. In London, the finance ministers dealt with bank capital requirements, often described in terms of sophisticated equity and debt ratios, as well as the more straightforward topic of bonuses taken by senior bank executives.

Regarding compensation of financial executives, there was agreement in having a separate body, the Financial Stability Board, provide recommendations to the heads of government meeting later this month.

Simply highlighting particularly greedy financiers, which would draw lots of media attention, does not really address underlying management challenges. That discussion may yet generate media sparks.

Public statements after the London conference testify to policy continuity. On September 7, Jean-Claude Trichet, President of the European Central Bank, held a press conference at the Bank for International Settlements in Basel, Switzerland. He stated that commitment to effective financial stability had been “confirmed at the global level.” Premier Wen Jiabao of China announced that unprecedented government spending to assist global recovery will continue.

The G-20 operates in the context of the International Monetary Fund, the World Bank and the World Trade Organization, global structures created during World War II to stabilize and develop the post-war economies. Their durability testifies to the farsightedness of Anglo-American leadership of that era. As Holmes also understood, effectively seeing into the future is as important as understanding the past.

Arthur I. Cyr is Clausen Distinguished Professor at Carthage College in Wisconsin and author of 'After the Cold War' (NYU Press and Macmillan/Palgrave). He can be reached at acyr@carthage.edu.

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