Mr. Martin was the first chairman of the G20. Mr. Martin was one of the people in the Canada team who called for the creation of the G20. At the time he was considering creating the G20, he called all the leaders of the G20 to discuss the creation of the group. Nineteen agreed, only one did not (George Bush). The funny thing is that when the crisis hit, Bush was the first to call for the G20.
- He says the main issue to discussed by the G20 is that the banks should strengthen their equity basis. Capital ratios, European argue that their banks are solved. The issue must be dealt with now. We cannot delay dealing with this.
- Equity: banks must have a common minimum standard. Must be subject to international standards. We cannot be subject to another Lehman Brothers or another AIG.
- Sistematic risk remains. Must deal with the issue now, because memories fade.
- Trade inbalances cannot continue. China's export model is not sustainable. Its customer (the U.S.) is no longer there. He thinks its domestic consumption will increase.
- Bank regulation should be done by each country, but there must be global regulation as well, otherwise each country will do what it can to attract banks, and that may include easing its regulations (such as a minimum reserves). Without agreeing to be subject to this global regulator banks should not be allowed to operate in another country.