What didn't happen at the London summit matters more than what did.
By the time the G-20 nations gather again in November, perhaps this gang of economic heavyweights will have learned how to really handle a global recession.
As it is, their April 2 summit in London – while a noble show of global unity – mainly showed that what doesn't happen behind closed doors matters more than what does.
The Group of 20 meeting took place largely because of a demand by French President Nicolas Sarkozy to set up a global regulatory cop to rein in excessive risk-taking by financial institutions – mainly American and British.
For two reasons, he rightly didn't succeed.
As long as the world remains organized around sovereign states, capitalism will largely be regulated within each state. Even the European Union can't agree on tougher rules for hedge funds, etc.
A second reason is the difficulty of regulating complex financial instruments. Even the people who design them failed to see their flaws as this crisis unfolded. Would a global cop do any better at assessing such intricate risk? Exhibit A: The SEC's inability to uncover Bernie Madoff's scam.
The G-20 did agree to coordinate each country's new regulations through a new Financial Stability Board. But anyone who's ever held a job of "coordinator" knows there is no authority in it.
Mr. Sarkozy will have to settle for new regulations being set by the US and the UK. Even those restrictions would be better if they mainly forced transparency and higher capital reserves on financial institutions rather than tried to have regulators assess ever-more-exotic risky ventures.
The summit's effort would have been better directed at helping banks rid themselves of bad loans. As it was, on the very day of the summit, the US did far more to boost stock markets than the summit did.