In an article in the FT a few weeks ago, India warned of damage from the G20 tensions caused by the nations not getting their act together on the issue of currency exchange rates. This is not surprising and there is a real danger of this degenerating into trade protectionism.
The aim of negotiations on this topic is to find an exchange rate mechanism that gives global parity and minimises the impact of one nation’s currency over another. However, the incentive is undoubtedly greater for some nations than others as a global power battle appears to be unfolding. On the one hand are the Anglo American powers whose influence is on the decline.  On the other, is the growing power of China. Only a few weeks ago, the US put pressure on China to make the Yuan more expensive in order to increase global competitiveness. In response, [...]

At the G20 and elsewhere, we’ve heard government leaders like Obama and Brown calling for more regulation to prevent financial institutions from growing too large to fail and obfuscating their responsibilities. These calls are all well and good, but they aren’t a panacea. The problem with too much regulation is that it slows down markets and hampers growth. The ‘greedy bankers’ that have been reported on so often in the press aren’t the problem—they’re only the symbol. They’ve just been following procedures in a marketplace incentivised by short-term thinking and by imbalanced approaches to risk-taking. [...]