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European leaders call for increased financial regulation in lead-up to G20 summit

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] European members of the Group of 20 (G20) financial policy body said Sunday that tighter regulation of the financial industry and liberal trade policies are necessary to help the global economy recover from its recent downturn. The leaders met in Brussels to discuss the "European position" on how to address the crisis, in anticipation of the full G20 meeting on April 4. In a release on the talks, German Chancellor Angela Merkel  announced that the group specifically wants to double the budget of the International Monetary Fund (IMF), increase regulation of hedge fund operators, impose sanctions against countries which host tax shelters, and discourage protectionist trade policies. The G20's last meeting  was in November, during which members called for global solutions to the crises to be presented at the April meeting. It remains unclear how other world economic powers, like the US, will respond to the European initiatives, given the country's prior resistance to increased regulation of the international financial industry. Last week, the US took a major step in its effort to stimulate its economy through the passage of the American Recovery and Reinvestment Act (ARRA). The act originally raised global concerns  of protectionism with its controversial "Buy American" clause requiring that all goods used in funded projects to be made in the US. The bill has since been amended  to clarify that the law will be applied consistently with US obligations under international trade agreements. 

Full post as published by JURIST - The Paper Chase on February 23, 2009 (boomark / email).