World leaders have been reconvening in the US this week to discuss the global economy. Back in April, those same leaders debated what measures should be taken to avoid a severe and protracted recession, now they must decide what steps should be taken to boost the international markets. They will also look at how to construct a regulatory system which allows financial institutions to operate competitively in a global market place while not exposing themselves, their shareholders and the financial system to unnecessary risks.

True, the world has moved on since April and there are signs that recovery is on its way: There is hope for a pickup in mergers and acquisitions across the globe, confidence is returning and India in particular appears to be weathering the storm. That said, we are not out of the woods yet. We have moved on from “crisis mode" to recovery mode, but there are still difficult decisions to be made.

There are three key issues which I believe should shape the discussions later this week. Firstly, ministers must not get bogged down by headline grabbing agreements about limiting bonuses and punishing bankers. Rather they should focus on more difficult issues such as transparency and accountability and whether banks are managing themselves properly.

Also Read Lord Mayor Ian Luder’s earlier columns

In light of this, we need globally agreed principles to underpin the regulatory system of the major world economies, while recognizing that a “one size fits all" solution is not the answer. Clearly there needs to be flexibility between regions and countries, but Group of Twenty leaders should strive for consistency of rules which govern our financial systems. For example, there should be agreed standards by which investors can judge the firms they hold shares in and, indeed, more broadly around the issue of their responsibilities for policing their companies.

Critical role: (from left) India’s finance minister Pranab Mukherjee with Guido Mantega and Xie Xuren, his counterparts from Brazil and China, respectively, at the 4 September G-20 meet in London. Simon Dawson/Bloomberg

Thirdly, countries must commit to working together. The current crisis has inevitably led to a desire for countries to retreat back within their borders and an increasing emphasis on national self-interest. Very real concerns about globalization, and the risks it presents, have led to protectionist sentiment creeping into discourse, but turning inwards is clearly not the answer.

Contrary to wishful thinking in some quarters, our markets cannot operate in isolation but are inextricably linked to each other. This year more than ever, it has become clear that global problems need global solution; the world demands nothing less.

Ian Luder is Lord Mayor of the City of London. His principal role is ambassador for all UK-based financial and professional services. The Lord Mayor is elected for one year and the position is unpaid and apolitical. It is an exceptionally demanding role. The Lord Mayor spends some 90 days abroad to represent the City of London and addresses some 10,000 people face-to-face each month.

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