a key point at this stage is to decide what requires swift international coordination, and what is best left, at least for now, to jurisdiction - level experimentation. the g7 and g20 have a key role in steering the process of finalising the post - crisis financial regulation. the second issue that the italian presidency intends to move forward on is that of inclusive growth. here, too, there needs to be interaction between the g7 and g20, not least because economic and social marginalization is a concern for advanced and emerging economies alike. inequality is a new subject to acquire top priority in the g7 agenda, but it is now at the forefront of the political debate. its causes, trends and political consequences are discussed daily by the media and have become a popular topic in economic research as well. let me first state one fact that is too easily forgotten. globalization has been an enormous driver of growth in emerging countries, including in the two largest countries in the world. it has thus reduced overall world inequality. it has lifted millions, indeed hundreds of millions, out of poverty. at the same time, inequalities within countries have increased. this is most obvious in a number of emerging economies. but in advanced economies too, the benefits of globalisation have not been equally distributed. growth has been more subdued than in emerging economies ; the income of the median household in many countries has stagnated over the past decades ; the middle classes ’ perception of the future has worsened. while this fact is more or less universally true, the causes and effects differ somewhat across countries. in italy, for example, where the recession has been more severe and protracted than in other advanced economies, younger generations have been hit hardest, with high ( though now decreasing ) rates of unemployment, a greater risk of poverty, and reduced income and career opportunities. in any event, the perception that there is a need to counter rising inequality and mitigate its consequences is widespread. policy options to deal with this fact will be the focus of the discussions that we propose to stimulate within the g7 and g20. however, one should be aware that perceptions of economic unfairness and concerns about diminished lifetime prospects, while important, are hardly the whole story ; dissatisfaction and disillusionment in our societies, and growing diffidence towards international and supranational institutions, are likely to have broader causes. in other words, the perception that something has gone wrong extends beyond the losers from globalization ( as

be deferred until it is earned. one major industry affected by these concepts is the financial services industry. while a small amount of revenue is received for transactions, most is generated by sales that lead to future revenue streams, such as that when a checking account is opened. in the context of the financial services industry, the accounting practice used today is sometimes called the “ mixed attribute ” approach. this means that some assets and liabilities continue to be recorded on a historical cost basis, while others are reported at fair value or at lower - of - cost - or - market ( locom ). in some instances in the mixed attribute approach, changes in fair value are reported in earnings, while in other cases they are excluded from earnings but affect the equity portion of the balance sheet. for example, assets that are included in the trading account are carried at fair value and changes in fair value are reported in earnings during the period. however, securities that are intended to be held until maturity are reported at amortized cost with no change in fair value recognized in earnings unless permanent impairment has occurred. loans that are held - for - sale are separately reported on the balance sheet and recorded at locom, while loans that a bank intends to hold for the long - term are reported at amortized cost. the mixed attribute accounting model is effective for financial services because it reflects differences in the earnings process. thus, when profits are generated through the trading account, earnings are driven by the activity of buying and selling securities. traders make decisions about what to buy, and the market timing of the purchases and sales rest on comparisons of relative returns on the alternative securities. the success of a trading account as a business reflects management's ability to identify unusual valuations in the market and quickly act upon them. in this case, a fair value framework is appropriate for accounting since it is similar to the information and decision process that management is using. an example of a different business model is a floating rate loan that is made and held on the balance sheet with the intent to service the loan until it is paid off. here, the floating rate means that changes in market interest rates will not affect the fair value of the loan. rather, credit quality and the cost to service the loan are the two major drivers of profitability. management's ability to underwrite the credit initially, manage changes in credit risk over the life of the loan, and limit losses of principal and interest and collection costs should a default occur, are key