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Global Governance – Canadian perspective – Paul Martin

I am live blogging from the Friedrich Ebert Stiftung/ Munk Centre/ University of Toronto conference on Global Economic Governance.  The keynote speaker is Paul Martin (PM) who is up next.  Introductions first from Werner Puschra, Director, Friedrich Ebert Foundation, New York Office and John Kirton, Professor, International Relations Programme, G20 Research Group, Munk School of Global Affairs, University of Toronto.  Basically Martin a former PM of Canada is being introduced as the ‘father’ of G20.

martin

Notes on Martin begin here:

Global governance requires a global steering committee covering these issues.

  1. breadth of issues
  2. priority
  3. results
  4. ability to reach out to those not represented in the G20

Nations will negotiate in their own self interest.  More and more each country’s self interest is reflected in global interests. Members are members because of power and position, but their responsibilities go much further.

Three examples.

  • poverty
  • banking
  • climate change

Food shortages are and imbalances in the food chain, especially Africa.  Governments are downing tools on Africa and awaiting the next banking crisis.  Speaking at length about Africa, mentioning Burquino Faso and other countries where the crisis is desperate.

Climate Change:  The next meeting is November in Mexico.  Mistake to not have a G20 parallel meeting of leaders on climate change.  Some movement earlier this year in Europe but will G20 pick it up.

Banking:  todays financial crisis shows just how unprepared the economies of the global economy are.  Too many countries are having to confront devastated balance sheets (Greece).  Notes the UK Government budget this week.  If there is another banking crisis and it doesn’t look good in Europe then the impacts will be enormous.  Need a protocol to unwind banks.  If a bank is too big to fail, it is too big.

Principles of banking.  Strengthen national regulation but that is not enough.  Suggests the FASB is the best governance against systemic risk.  Standards must be mandatory.  Peer review ass proposed is inadequate.  Much talk of ‘future banking crisis’.  If bankers are expecting to act globally, then the referee must be global.

Bankers, shareholders must understand when they cannot take excessive risks and accept the profits with Government support in bad times is no longer involved.

G20 is no longer a club of self interest.

Rise above self interest and nationalism.  The current definition of sovereignty is outdated (1648).  G20 must be talking about what is required to protect sovereignty in the context of todays global environment.  In the last few months the last vestiges of old style sovereignty have been stripped away. (Greece, Portugal)

What the American and European governments have to come to terms with is that when the Chinese, Indian and Brazilian economies stumble as they grow there will be no bailout package large enough.  The host country can significantly influence the G20 agenda.

Don Newman, CBC is up with Madelaine Drohan, Canadian correspondent The Economist to facilitate questions

Bank Tax.  peripheral issue.  PM …No government should pass a law it cannot enforce.  The largest and fastest growing banks are state owned (China, Brazil)

Madelaine:  some do not like the G20.  How will it relate to the UN.  PM:  membership was picked by Martin and Larry Summers (?).  To reopen the membership would open a pandora’s box.  However it is important to reach out to all countries.  Having said that it cannot rival the UN.  G20 is a deliberate group that makes recommendations.  At the time of UN reform the commission recommended a group of 20 nations provide some sense of direction to the debates.   The numbers in the UN work against ability to make a decision.

Audience:  view on fiscal exit strategies. PM … (Andrew – known by Martin).  If you have slow economic growth and you cut further you will slow growth.  ‘The government is not going to be in my pockets forever so I will have more confidence’.  If the UK economy withstands yesterday budget it will be in good shape in 2 years.  There is no cookie cutter approach.  Martin is a believer in draconian budgets.  He supports the UK approach.

Audience:  question on Canada’s role in global peace.  PM.. Canada’s voice should be heard.  Canada can take a leadership role in certain areas and one key is Africa.

Audience:  Food security:  would fair trade be a better model.  Africa’s inability to penetrate foreign markets but the major issue is Africa’s inability to feed itself.  Africa should be a breadbasket.

Audience:  Is it time for a financial transactions tax.  PM …  this is separate from a bank tax.  Answer is fudgy .. generally thinks its worthy of consideration.

Audience:  are you considering re-entering federal politics.  PM …  No 🙂

Audience:  global bank regulation and standards for liquidity and capital.  PM … extend review to all members of UN or IMF.  A model could be the World Trade Organisation (WTO).  Usage of peer reviews and recommendation for approval by the Financial Stability Board (FSB).  Certain degree of enforcement by global banks seeking common standards across countries.  (Speaking to the quality of Canadian banks) “I was the guy who toughened up the Canadian bank rules and I got little push back from the Canadian banks”.  PM Anecdote:  Martin as PM wanted to visit head of OSFI (Canadian bank regulator) but David Dodge Governor of Bank of Canada told him that was impossible unless accompanied by the Governor of the Bank of Canada.

Madelaine;  on influence of the G20 host.  PM .. yes the host country could scuttle G20 outcomes if they disagree because of their control over the agenda.

Thats it.  Back later for keynote from Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs, United Nations, facilitated by Chrystia Freeland, Global Editor at Large, Thompson Reuters (previously US editor Financial Times)

Written by Colin Henderson

June 23, 2010 at 09:27

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  1. […] On Global Economic Governance In Advance Of G-20 Meeting By theyenguy The Bankwatch reports that Paul Martin addresses the Friedrich Ebert Stiftung/ Munk Centre/ University Of Toronto […]


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