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Much discussion on the inter-tubes post the Obama/Dem landslide about the need to get the global economy going and at the same time resolve the clear problems with the de-facto Bretton Woods II arrangement in which the poor emerging economies finance consumption in the rich US, UK and EU.

Martin Wolf does a good job laying out the background, since the original Bretton Woods in 1944:

…what is happening lies at the intersection between global macroeconomics – money, the exchange rate and the balance of payments – and global finance: capital flows, financial fragility and contagion…

The Bretton Woods institutions – the IMF and the World Bank – are dominated by the western powers: in the case of the Fund, the US still had 17.1 per cent of the quotas (which largely determine votes) and the European Union another 32.4 per cent in May 2007. Meanwhile, China had just 3.7 per cent and India 1.9 per cent… Mr Zoellick suggests a G14, which would add Brazil, China, India, Mexico, Russia, Saudi Arabia and South Africa.

The world needs to:

• re-organise global institutions to include the new players (eg. BRIC, Gulf)
• limit large and persistent current account surpluses
• buffer sudden changes in capital flows
• buffer swings in risk appetite

Gulf countries are getting more aggressive with calls for a currency union to provide a natural hedge against swings in USD, EUR, and JPY.

Gulf states are now hammering out details on the shape of a future joint central bank in preparation for a single currency they hope to have in place by what increasingly seems an unlikely 2010 deadline…

“If we create a GCC single currency, I have no doubt it would become a global currency,” [said Dubai International Financial Centre's chief economist, Nasser al-Saidi] “It would be a natural hedge for oil price and inflation risk. If you have it on the table, you can address global imbalances better.”

The rump Bush administration has already dismissed calls for a global financial regulator.

Ten days before the leaders of 20 countries assemble here for an emergency summit meeting on the financial crisis, the Bush administration discouraged suggestions that the gathering would create a new international market regulator with cross-border authority… Given the timing, some experts argue that the leaders should focus on issues that are more likely to win the backing of an Obama administration, like coordinating economic stimulus programs in the United States and Europe to cushion the blow of the recession.