The London summit of the G-20 approved proposals for a 5-trillion-dollar global stimulus turnout before 2011. One trillion dollars will go to boost the lending power of the IMF. The Fund will also raise emergency rescue cash by selling 50 billion dollars worth of gold from its reserves. It will circulate 250 billion dollars in special drawing rights, a prototype super-sovereign currency for the modern world.

Rector of the Russian School of Economics Professor Sergei Guriyev says the decisions go along with pre-summit proposals put forward by Russia: “Together with most other G-20 members, Russia supported closer supervision of hedge funds and banks. It also secured a majority backing of its initiatives to beef up the IMF and issue the special drawing rights. At present, the SDR market is estimated at 40 billion dollars. The potential is now for 250 billion.”

As soon as the crisis starts bottoming out, the big economies will tighten their regulation of banks. At the moment, they are cracking down on unjustified banking secrecy, tightening rules for rating agencies and putting curbs on managerial bonuses and severance packages. At the next meeting of their finance chiefs, the G-20 may also act on a British proposal to compile a blacklist of notorious international tax havens.

The consensus at the London summit inspires hope of no new Great Depression in the offing. Back in the early thirties, it was poor coordination and going-it-alone that sent the world into its worst economic abyss.

At a summit late this year, the G-20 will assess progress on their guidelines in London.