Finally, agreements will be made on the future of financial regulation. Everyone (including the Americans) agrees that the US system, of dozens of uncoordinated financial regulators, is dysfunctional and needs a massive overhaul. The European continent wants the ability to meddle in the regulation of London and New York, and the US and the UK want no such thing. There may be a long way to go on this front. At present there is little consensus on what the final destination is. India has a framework of bans on financial products and innovation because the government perceives them to be risky. While some people may feel that this saved India from being affected very strongly by the global financial crisis, this is not a solution acceptable to anybody else in the G-20. India, therefore, has little to contribute to this discussion.

In summary, the G-20 meetings in London are an important milestone in the process of getting the world economy back on track.

India is flattered at having been invited to the high table. While today India has little in terms of ideas or depth of experience to offer genuinely useful suggestions on these questions, it can be hoped that being part of this process will give India the confidence to be an enthusiastic and active participant in the financial system that emerges from this process.

The writer is senior fellow, National Institute of Public Finance and Policy, Delhi

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