By Nick Morrison (AFP) – Nov 4, 2011
AS WE WRAP UP THIS AFP live report on the second day of the G20 summit in the French resort of Cannes, here is a summary of this morning's developments:
-- the leaders of the world's economic powers have forced Europe to take measures to stop Italy following Greece into the abyss of debt, while also agreeing to boost the IMF's war chest
-- amid pressure from the United States and emerging nations, the European Union said Italy had accepted a humiliating deal to put its economy under IMF surveillance
-- the EU also said they would find extra cash for the IMF to help tackle the European debt crisis, although they failed to agree a figure for a new eurozone "trustfund" held by the world's top lender
-- there is no let-up in pressure on debt-laden Greece, whose ongoing political and economic crisis hung heavily over Cannes' rain-lashed seafront summit venue
-- Greece is bracing for a confidence vote set to take place in Athens at midnight (2200GMT) that could push the debt-wracked country closer to bankruptcy
1430 GMT: The Financial Stability Board (FSB) -- the international body that monitors the global financial system -- has published a list of the world's biggest banks which will all be required to meet additional capital rules in order to prevent a repetition of the 2008-2009 financial crisis.
These institutions are seen as too big to fail -- if they were to collapse it would present a systemic risk to the whole global economy.
The body had agreed in 2010 on tougher rules, the so-called Basel III regulations, requiring all banks to strengthen their capital reserves by raising total core reserves to 7.0 percent from 2.0 percent at the moment.
In addition, the FSB decided this year to impose further rules on the world's biggest banks, by asking them to hold 1.0 to 2.5 percent more in core reserves, on top of the 7.0 percent required for all banks.
They are to be implemented by 2019, the FSB said.
The body will update the list of major banks annually and will published the fresh list every November.
The 29 banks subject to additional restrictions are: Bank of America, Bank of China, Bank of New York Mellon, Banque Populaire CdE, Barclays, BNP Paribas, Citigroup, Commerzbank, Credit Suisse, Deutsche Bank, Dexia, Goldman Sachs, Group Credit Agricole, HSBC, ING Bank, JP Morgan Chase, Lloyds Banking Group, Mitsubishi UFJ FG, Mizuho FG, Morgan Stanley, Nordea, Royal Bank of Scotland, Santander, Societe Generale, State Street, Sumitomo Mitsui FG, UBS, Unicredit Group, Wells Fargo.
1403 GMT: Silvio Berlusconi says Italy turned down an offer of financial aid from the IMF as it "wasn't necessary".
1355 GMT: Prime Minister Silvio Berlusconi has confirmed that Italy has asked the IMF to monitor its implementation of key economic reforms.
1345 GMT: Sarkozy also warns that tax havens -- and countries that don't share tax information -- will be shunned by the international community.
"We don't want any more tax havens. Our message is clear," Sarkozy said at the end of the summit in Cannes.
1337 GMT: French President Nicolas Sarkozy says he hopes for an EU transaction tax as soon as next year.
1327 GMT: An Italian government source denies the agreement for the IMF and the EU to take oversight roles over Italy's implementation of key economic reforms implies a formal "surveillance" mechanism.
"The Italian government will not be put under administration by the IMF or by anyone else," said Infrastructures Minister Altero Matteoli. "If this is being portrayed as being under administration, it's absurd!" he said.
France and Germany earlier said Rome would seek "advice" from the IMF over the economic reforms in the eurozone's third-biggest economy.
1320 GMT: Analysts say the renewed political turmoil in Greece could halt the disbursement of a new eight-billion-euro ($11-billion) aid package that Greek Finance Minister Evangelos Venizelos says the country "absolutely needed" by December 15 to avoid bankruptcy, my colleague in Athens Richard Carter adds from Athens.
He quotes a Barclays Capital research note which says tonight's confidence vote "probably holds the greatest uncertainty" of all the economic risks currently affecting Greece.
"A no vote would likely further cloud the timing of the disbursement of the sixth IMF tranche, in our view," the note said.
1315 GMT: While the discussions between world leaders come to an end in Cannes, Greek Prime Minister George Papandreou's political future is hanging by a thread, my colleague Richard Carter reports from Athens.
Papandreou is facing fresh calls to resign ahead of a confidence vote tonight that could topple his socialist government and push the debt-wracked country closer to bankruptcy.
The vote, expected at midnight (2200 GMT), is impossible to call, with Papandreou's PASOK party in theory holding a razor-thin majority.
PASOK has 152 members of the 300-seat parliament, but several deputies have threatened to rebel amid calls for a national unity government.
1255 GMT: Italy has asked the IMF to scrutinise its budgetary reforms, European Commission chairman Manuel Barroso and German Chancellor Angela Merkel have said.
"Italy has decided on its own to ask the IMF to monitor the implementation," Barroso told reporters as the G20 summit in Cannes came to an end.
Merkel confirmed at a separate news conference that the Italian government had agreed to quarterly reports on its reforms.
"We have explicitly agreed today that the IMF and European Commission should present their reports (about Italy) quarterly," the German chancellor said.
An Italian government source had earlier denied that the agreement implied a formal "surveillance" mechanism, and said instead that Rome would seek "advice" from the IMF on the issue.
1242 GMT: The world's biggest economies will provide additional resources to the International Monetary Fund to help tackle the European debt crisis, European Union President Herman Van Rompuy says.
Earlier, sources close to the negotiations had said countries would be allowed to make voluntary contributions to boost the war chest of the IMF, the world's lender of last resort, despite US reservations.
1235 GMT: The G20 final statement will refer to transaction taxes, although the world's biggest economies remain divided on them, European Commission chairman Manuel Barroso says in Cannes.
Barroso says there will be "some references in the conclusions to this tax on financial transactions" but also said that there was "no unanimity yet."
France and Germany have been pushing for a small tax on financial transactions to be adopted at the G20 as a mechanism to force markets to help pay for government efforts to rescue debt-ridden economies.
On Thursday, summit host Nicolas Sarkozy made a pitch for the tax, saying it is "technically possible, financially indispensable and morally inarguable."
But the scheme has run into opposition from the US, Canada, Russia, Australia and China, although Sarkozy suggested on Thursday following talks with President Barack Obama that US objections may be softening.
1230 GMT: Until now, Greece had not officially binned its referendum plans, with Greece's Prime Minister George Papandreou saying only that he was ready to scrap the idea if the opposition backed a massive EU bailout plan.
Finance minister Venizelos has also told EU officials the aim of a confidence vote in the Greek parliament planned for later today is to form a government of national unity.
"We want to obtain the largest consensus possible ... with the formation of a government in this sense," he said.
It remains unclear whether Papandreou will cling onto his post, but he told lawmakers late Thursday that he was not attached to his position, saying he was more interested in "saving the country."
1220 GMT: My colleagues in Athens report the Greek Finance Minister Evangelos Venizelos as saying he has told his European partners that Greece has officially scrapped its plan for the controversial referendum on the EU bailout.
Venizelos said in a statement he had told EU Economic and Monetary Affairs Commissioner Olli Rehn, German Finance Minister Wolfgang Schaeuble and Eurogroup chief Jean-Claude Juncker "of Greece's decision not to hold a referendum."
1214 GMT: To give you an idea of the surroundings at the summit, this from my colleague Dave Clark:
"The G20 summit is being held in Cannes' famous Palais des Festivals, which is better known as the home of the city's annual international film festival.
"Movie veterans tell me that the press centre in the bowels of the building has been completely revamped for the economic summit, and few signs remain of its more usual use.
"There is one film-themed clue, however: the soundtrack in the toilets. Yesterday when I popped in after my morning double espresso I was serenaded by the title music from "Jurassic Park", today by the "Star Wars" theme.
"The soundtrack to the "Italian Job" might have been more appropriate."
WELCOME TO AFP'S LIVE REPORT on the latest developments from the second day of the G20 summit of world leaders taking place in the French Riviera city of Cannes.
The leaders of the world's biggest economic power have been turning their attention on Italy, pressing for measures to prevent Rome from following Greece into the abyss of debt.
As the leaders put the finishing touches to a G20 summit statement designed to kick-start global growth and rebalance trade, senior European Union officials said Italy's economy would be put under IMF surveillance.
Italy bridled at the claim, insisting its measures were being monitored by the European Commission with only "advice" from the world's top lender, but Prime Minister Silvio Berlusconi's reforms were clearly under scrutiny.
And there was no let up in pressure on debt-laden Greece, whose ongoing political and economic crisis still hung heavily over Cannes' rain-lashed seafront summit venue, as an example of the threat facing Italy
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