G-20 participants agreed during the fifth meeting since the crisis started in 2008 to keep an eye on the imbalances between their economies, but offering no reassurances to investors that the world is a safer, more stable place for business.
The reunion in Seoul resulted in vague guidelines for measuring economic imbalances between the various developed and emerging economies, and left the details for another meeting in the first half of 2011.
Hinting towards China’s control over the yuan, the G-20 agreed to let the market set the exchange rates, while also pledging to put a stop to competitive devaluations – such as the one that the latest US’s Federal Reserve plans would spark.
The Federal Reserve decided last week to throw 600 billion dollars into the economy and the measure raised concerns from Germany, China and other states that US is purposely trying to devalue the dollar, a step that was defined as disruptive to the world economy, considering the vast impact it would have.
The leaders also agreed to put in place careful control measures, in an attempt to handle huge capital inflows that emerging markets are facing.
Despite such commitments, however, financial experts believe that countries will not do anything different from before.
Furthermore, the G-20 participants did not agree on the methods of identifying when world economic imbalances become a threat to stability.
In this respect, they only agreed on a future discussion – probably in the first half of 2011 – about a set of indicators.
