Guy Fawkes Summit in Mexico City for G20

This year November 5 was not just about Guy Fawkes, gunpowder, treason and plot.

Central Bank Governors and G20 finance ministers met in Mexico City from November 4 - 5 to discuss and assess the progress of the Basel III banking regulations.

What is the G20?

Also known as the G-20 and Group of Twenty, the G20 is a group of finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the President of the European Council and by the European Central Bank

This year Mexico became the first emerging country from Latin America to assume the annual Presidency of the G20.Their aims? According to the Communiqué of Ministers of Finance and Central Bank Governors at the summit it is:

 To promote robust growth and job creation and to address ongoing economic and financial challenges. We will do everything necessary to strengthen the overall health and growth of the global economy. Our main focus in the period ahead will be to rebuild confidence and to reduce risks and volatility in international financial markets; contribute to a faster pace of economic recovery and job creation, and promote the foundations for strong, sustainable, and balanced growth.

 That all sounds great, but is it really possible to rebuild the economy whilst at the same time hitting the banks with escalating regulatory restraints? After all, where would we be without the banks? As London Mayor Boris Johnson said recently:

Bang 'em up. Slam 'em away. But we need the political establishment in this country to stop slagging off a sector that is utterly crucial to the British economy and the current system of global capitalism – and after four years of navel gazing since the crash, we have yet to come up with an alternative.

Some doubt the practical value and effectiveness of the Basel III regulations.  The Basel Committee is influential, and regulatory authorities are expected to incorporate their recommendations and guidelines into their own national systems, but it but lacks international legal authority.

Back at the G20 summit, Juan Manuel Valle, head of banking supervision at Mexico's finance ministry, speaking in an interview to Reuters news agency, said that it was high time to crack down on nations which failed to ensure their banks implemented the Basel III regulations.

He said that banks which have failed to implement Basel III are operating in other countries with an unfair advantage, and called upon the G20 to do something about it.

One of the Basel III deadlines is looming up as soon as Jan 1 2013, and it looks likely that some countries will not make it.  According to Mr Valle the problem is that there will be no real consequences for failure to meet the deadline. He urged the G20 to create a mechanism to police the rules and ensure they are carried out as well as simply confirming their commitment to implementing them.