Obama outlines ambitious agenda for financial reform in letter to G20

President Obama on Monday sent a letter to the G20 that offered an ambitious agenda for preventing another financial meltdown. The White House released the letter on Tuesday. 

"We all have a mutual responsibility to deliver on all our commitments to address the weaknesses that led to the financial crisis," Obama stated in the letter. "This will require that we maintain our vigilance to address the required reforms and guard against complacency as our economies recover."

The letter called for all G20 nations to accept international banking rules by 2011; require all derivative trades go through a clearinghouse by 2012, at the latest; fully implement compensation standards set by the Financial Stability Board; and create rules that ensure against moral hazard if another financial crisis hits. 

Obama also called on the U.S. to "lead by example" by implementing these standards by 2010 and be subjected to peer review on how it is complying with the new rules. 

"Achieving the ambitious peer review agenda that has been set for 2010 will be an important milestone," Obama stated in the letter. 

The G20 is scheduled to meet in Toronto in June and in Seoul in September. At these meetings, status reports will be generated on where the countries stand in meeting the goals Obama laid out in his letter. 

"Our finance ministers and central bank governors will review progress and report to Leaders in Toronto and in Seoul on the priority actions needed to meet  our commitments and whether further impetus may be required to ensure that established timelines are met," Obama stated in the letter.