Ninja Monkie Bacchanal

From MSNBC.com:

World leaders holding an emergency meeting to combat the economic crisis agreed Saturday to a far-reaching action plan that, over the next 4 1/2 months, would begin to reshape international financial institutions and reform worldwide regulatory and accounting rules.

Under the plans outlined by the leaders, countries such as China, Brazil and India would gain greater roles and responsibilities as part of a restructuring of the international financial system, while European leaders won a commitment to new regulations and controls on banks, rating agencies and exotic financial securities. The leaders also agreed that a dramatic failure of market oversight in “some advanced countries” was among the root causes of the financial crisis, an implicit rebuke of the United States.

I am curious how the new Obama administration will address this in April. With the inclusion of China, India, and Brazil in leadership roles within the World Bank and IMF, we are in for some more serious change. Not necessarily bad change, but certainly painful change.

The leaders agreed to set up a new regulatory body, “a college of supervisors,” to examine the books of major financial institutions that operate across national borders, so regulators could begin to have a more complete picture of banks’ operations. They demanded greater scrutiny of hedge funds and the completion of a clearinghouse system to help standardize and limit risk on some of the opaque and exotic financial derivatives that helped bring down Wall Street’s investment banks.

Leaders also agreed to submit their countries’ financial systems to regular, vigorous reviews by the International Monetary Fund — assessments that some countries, including the United States, had long resisted. And they urged new constraints on the pay schemes at financial firms that “reward excessive short-term returns or risk-taking.”