Redwood: Reality check for the G20

The last G20 meeting did not save the world. The last time one did so, it entailed nationalising or supporting large banks.

This approach delayed the adjustments and burdened states with huge debts that today are proving difficult to handle. This G20 was more realistic. The world has run out of money to fix the big black holes in some banks and state budgets. The G20 showed up three fault lines. The emerging market power houses did not accept the script that had been prepared by their French host. They said ‘no’ to putting large sums of their hard earned money into a fund to buttress weak euro area states. The US did not seem much keener on the idea of helping bail out distressed euro area countries eithe...