The Obama administration didn't get the coordinated stimulus plan it wanted from the G-20 economic summit in London. But the Group of 20 nations did agree on an alternative — one that would be channeled through the International Monetary Fund. If commitments are kept, the IMF could have as much as a trillion dollars to disburse.
Simon Johnson of the Peterson Institute for International Economics says "all the attention's going to be on the IMF."
"Between now and the next G-20 summit — which I think is going to be in, roughly speaking, in September — the IMF has to deliver in terms of loans and in terms of showing that it can really engage with countries that are getting into trouble, and help them out," Johnson says.
In the past, many governments have said the IMF puts too many conditions on the loans it gives to needy countries. But the new lending program approved in London removes many of those conditions — and triples IMF resources.
Johnson, who used to be chief IMF economist, says "the IMF needs to get $500 billion, $800 billion out the door in order to really have an impact and demonstrate that it can take the lead here."
"This is an opportunity for the IMF," he says, "but it's by no means a done deal that the IMF is going to play this new, much more constructive, much more central role in the global crisis."
That's the first big question coming out of the G-20 summit: Can the big IMF lending program spur the developing countries to return to growth and thus help the global economy?
For that to happen, there will need to be a revival of international trade. As much as $250 billion in IMF resources could go to finance importers and exporters in the emerging economies.
That's a great idea in theory, says Eswar Prasad of the Brookings Institution.
"At this stage, we have the headline number of $250 billion, but we don't really have any precise details of where this money is coming from exactly or how it's going to reach its intended recipients," Prasad says.
The top importer in the world is the United States. If a global recovery is to come through trade, the U.S. consumer will have to go back to buying things made in other countries, which is not a great way to put Americans back to work.
But Prasad says this may be part of the price the U.S. has to pay for a global economic recovery. "The reality is that in the short run, in terms of the recovery process, the U.S. is still going to have to pull the rest of the world along, because it's very difficult to find other pockets of strength in the world economy right now."
That's another question raised by the G-20 commitments: Can the U.S. and other rich countries jump-start world trade?
The big critique of the London summit is that the governments failed to agree on immediate coordinated policies on stimulus spending, interest rates and toxic assets in the banking sector. Those areas have been left for individual governments to manage.
U.S. Treasury Secretary Timothy Geithner, fresh from negotiating with his G-20 counterparts, is due to hear this week from the committee overseeing his own Troubled Asset Relief Program.
In an interview published Sunday in the New York Post, the chairwoman of the oversight committee, Elizabeth Warren, is quoted as advocating the dismissal of top executives at institutions getting government subsidies — Citigroup and Bank of America, for example.
Asked about that report on CBS's Face the Nation, Geithner pointed out, "Where the government has acted, where we've had to do exceptional things to stabilize them, we have replaced the management and the board. And we've done that because we want to make sure that taxpayers' assistance is going to make these companies stronger, make sure there's accountability, make sure it comes with strong conditions. And we'll do that in the future, if that's necessary."
Some critics say the Obama administration has not been hard enough on big bank executives. In that Face the Nation interview, Geithner denied a published report that the administration is looking for ways for companies to get around congressionally imposed limits on executive pay.
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