After all it was being convened less than two years after what US president Clinton called the most serious financial crisis in the post-war period. Moreover, this crisis was the latest in a series that rocked the world financial system in the 1990s. In 1992, there was the crisis of the British pound, which forced its withdrawal from the European exchange rate mechanism and severe financial strains in the Scandinavian banking system. But nothing of the sort eventuated. Serious observers of the world economy, however, are well aware that such statements amount to meaningless blather.
Domestic reforms are the best way to prevent disaster.
But action can also be taken at an international level, to reduce the risks of imbalances building up, and to deal with crises more effectively when they do occur. A host of ideas for reforming the global financial architecture following the Asian and Russian crises have come to almost nothing. The leading G7 countries have so far lacked the will to tackle the really difficult issues, such as involving the private sector in crisis resolution, or changing the way the International Monetary Fund lends to cash-strapped economies. The reason no co-ordinated action could even be seriously addressed, let alone implemented, lies in the deep divisions among the major powers. Those divisions erupted to the surface last December with the collapse of the ministerial meeting of the World Trade Organisation in Seattle.