PITTSBURGH, the host of the next G20 summit on September 24th, is known as the “city of bridges”. Anyone watching the build-up to the meeting may have already concluded that they will lead to nowhere. The warm-up event, a meeting of finance ministers and central bankers in London on September 4th, produced a fog of contradictory statements by multiple politicians, some from the same countries. Depending on whom you listened to, capital requirements will get tougher quickly—or very gradually, to prevent banks shrinking their loan books. Bonuses will be governed by strict formulas—or by broad principles. Accounting rules will be made more forward-looking—or loosened to prevent big losses coming all at once. [...] Does that mean Pittsburgh will be a damp squib? It may yet produce some fireworks on bonuses, but not on any of the deeper issues: a forced wave of equity-raising by European and Japanese firms is highly unlikely. In a sense that is a good thing. Reforming the financial system is complicated. And although banks need much more capital, there is no hurry while they are wrapped in state guarantees and the economy is fragile. Pittsburgh may even be exactly what is needed—loud talk, and the delegation to experts [il riferimento è al Financial Stability Board] of the design of new and bigger sticks.
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