The G20 is on the brink of a deal this morning that will require members to "peer review" one another's economic policies—a substantial shift that will expose the US and China to wider scrutiny from less wealthy countries. The new top table for international negotiation wants less American borrowing, more Chinese consumption, and more European investment. But while the IMF will assess whether those plans are working, the G20 won't introduce any enforcement mechanisms, such as sanctions, reports the Wall Street Journal.
The G20 leaders will also announce a new approach to tax havens, moving beyond the "name and shame" policy introduced in London to a new, tougher review system. Negotiations continue on the issues of executive bonuses and minimum capital levels for banks, on which the US and Europe are divided. Another thorny issue is the future of the IMF; the US badly wants to increase developing nations' power at the fund, but Tim Geithner said yesterday he doesn't expect the G20 to reach a compromise.