G-20 Reins in Finance

Watch out CEOs, the G-20 is in session. The gathering of the world's most powerful leaders reached an agreement Friday to tighten regulation on financial institutions and restrict executive pay in order to discourage the risky short-term profits that fueled the latest crisis. “We have achieved a level of tangible, global economic cooperation that we’ve never seen before,” President Obama told The New York Times shortly after the summit meeting. “Our financial system will be far different and more secure than the one that failed so dramatically last year.” While there is little to enforce the various agreements back in the leaders' home countries, one interesting feature is that countries will submit their economic policies to the group of nations for feedback. Because the United States is expected by the G-20 to reduce its trade and budget deficit—both daunting tasks—and increase its savings rate, the country used to going its own way may find itself the target of criticism.