G20 points to a new era of regulation - but by whom?

The communique from the summit says that the Financial Stability Forum will be revamped into a Financial Stability Board and given new powers to oversee  (note, not regulate) banks and international markets. However, it also says that the International Monetary Fund should take a stronger role in supervising the world financial system. Are the seeds of conflict being sown here?

The communique from the summit certainly sets out a tough sounding manifesto for regulation and supervision but is too quiet on how that should be delivered. This probably leaves the door wide open for the European Union, with the strong backing of France and Germany, to pursue the agenda it has already set out in the Larosiere Report. This could create further conflict with the newly emboldened FSB and IMF.

Of course, another key point of interest to many of us will be how this will play out in the battlefield of domestic politics. Gordon Brown has won alot of praise for getting a consensus on so many points out of the summit, although he did fail on the major fiscal stimulus he was hoping for. This throws the focus back onto the Budget later this month. Without the extra help he was hoping for from the rest of the world and UK government spending already seriously over-committed, he has limited room for manoeuvre with time running out. The potential medium to long term benefits of the summit deal will not be enough to revive Labour's political fortunes. They need something that is going to make a major impact in the next 12 months if the Prime Minister's success on the international stage is to help him towards electoral success next year.