G-20 Summit: Thorny Issues, a Soothing Outcome?

Unless U.S. President Barack Obama and British Prime Minister Gordon Brown manage to pull off some last-minute lightning, the save-the-world Group of 20 summit in grimy East London at an exhibition hall ordinarily used for boat shows probably won't offer many big achievements. On the summit's eve, the best outcome looks likely to be a soothing pledge by world leaders to continue efforts to turn around the ailing world economy. The gathered politicians may offer more detailed agreement in some areas, including a big capital boost for the International Monetary Fund, the need to impose stricter global rules on banks and other financial actors, and further tightening of the screws on so-called tax havens.

A few weeks ago, with expectations running high and markets in meltdown, such a minimal outcome might have been a disaster. Now, following a sharp runup in equity markets and some signs that parts of the world economy are improving—or at least getting close to a bottom—it may be less urgent for the G-20's presidents and prime ministers to reach sweeping agreements that were probably unrealistic anyway. "I think there is a little less pressure on these leaders to solve the world's problems than three or four weeks ago because the markets have a better tone," says Larry Kantor, head of research at Barclays Capital (BCS), the investment banking arm of the big British bank.