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Leaders of the Group of 20 major economies (G20), including the United States, China, Japan, Russia, Canada, Australia and Brazil, are to meet on Sunday and Monday in the Mediterranean resort of Antalya primarily to discuss global economic issues.
Economic discussions will center on three main issues at the summit: the risks to financial stability from sharply divergent monetary policies in the United States and Europe, China’s slowing growth and its transition from an export to a consumer economy, and the impact of slumping commodities prices.
The world’s top two central banks, the European Central Bank and U.S. Federal Reserve, appear poised respectively to ease and tighten monetary policy, divergent paths likely to trigger a series of jolts in financial markets.
A senior U.S. Treasury official said on Tuesday Washington would urge those at the summit to use monetary, fiscal and structural tools to offset a shortfall in global demand. Obama is seen as going into the meetings with a strong hand.
“The U.S. is the only country, really, in the G20 that is on a positive growth trajectory,” said Matthew Goodman, a former Obama foreign policy adviser now at the CSIS think-tank in Washington. He noted it had also just sealed the Trans-Pacific Partnership grouping 12 Pacific rim countries, a pact aimed at freeing up commerce in 40 percent of the world’s economy.
G20 leaders will also be asked to endorse the last major financial reform meant to end the phenomenon of “too big to fail” banks in the wake of the 2007-09 financial crisis.
The reform requires the world’s 30 top banks to issue a buffer of bonds by 2022 that can be written down to raise funds equivalent to 18 percent of risk-weighted assets, if the lender goes bust.
The aim of the buffer, known as total loss-absorbing capacity or TLAC, is to let a big bank fail without creating the kind of mayhem in markets seen after Lehman Brothers went bust in 2008, triggering taxpayer bailouts of other lenders.
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