On November 12, the prime ministers and leaders of the world’s 20 largest economies will meet in Seoul, South Korea for the fifth in a series of G20 Summits meant to respond to the global financial crisis and to ensure that the mistakes which lead to the debacle in 2008 will never be repeated. From Washington, DC (2008) to London (2009) to Pittsburgh (2009) to Toronto (2010), the G20 Summits are, in short, a demonstrated commitment on the part of our leaders to satisfy the public demand for financial reform.

Alas, we should not expect much from Seoul. As our experiences in the past two years would indicate, agendas get set from one summit to the next and are then forgotten. The topics of discussion routinely fail to take into account the long-term needs of the world and instead produce only short-term responses to the impending events which happen to be making headlines at the time the G-20 meets.

Here are a few examples – during the London Summit in April 2009, there was an urgent call to reform the financial system as the markets dropped to their lowest levels since the beginning of the crisis. In the communiqué that followed the Summit, the leaders of the world committed to a “green recovery and to sustainable global growth.”

So what about those financial markets reforms?
Well, the G20 agreed to an agenda consisting of seven key issues, to be addressed during the forthcoming Pittsburgh summit: leverage, rating agencies, accounting standards, hedge funds, bank secrecy, compensation and OTC derivatives. We would have to wait for five months to see the reform underway. But, in September 2009, when the G20 met again, the final press conference announced that the outcome of the discussions focused on none other than…the nuclear threat posed by Iran.

Given that not much more had been achieved, our last hope was Toronto. But this time the Toronto meeting focused on the role of international financial institutions, calls against market manipulation and declarations of solidarity with those countries suffering “the attacks of speculators.”

What should we therefore expect from Seoul?
The Toronto meeting ended with a clear determination to reform the financial system and to boost economic recovery. The 20 nations, which collectively represent 85 percent of global GDP, pledged “to act together to achieve the commitments to reform the financial sector made at the [previous] Summits.” A few lines later, the final communiqué of the Toronto Summit reads that “Our reform agenda rests on four pillars.”

So perhaps the answer lies in an understanding of what these four pillars really are:

1. Provide a strong regulatory framework — specifically, the need for a new global regime for bank capital and liquidity, pioneered by the Basel Committee on Banking Supervision (BCBS). On this point, we have certainly made progress, as the new capital requirements for banks have already been agreed upon and implemented in most countries. It is true that not much has been done to improve transparency and oversight of hedge funds, credit rating agencies, and OTC derivatives so we should hope that this will be addressed in Seoul.
2. Effective supervision and early intervention systems. By this the leaders of the world mean putting executive powers into place in order to detect and stop banking crisis before they reach the level of extremity that we saw in 2008.
3. The third pillar describes systemic risk and systemic institutions. This pillar closely relates to the previous commitment made in Toronto where the G-20 called for “policy recommendations to effectively address problems associated with, and resolve systemically important financial institutions by the Seoul Summit.” Such recommendations should include a system by which financial institutions themselves can finance any burden associated with government interventions.
4. Finally, the fourth pillar is transparent international assessment and peer review. In other words… bank secrecy again. Although an interesting conflict, bank secrecy is completely unrelated to the financial crisis. As is the reference in the Toronto Summit to money laundering and terrorist financing, which I suppose the leaders of the world must somehow relate to the falls of Lehman Brothers and AIG…

There are, of course, other non-financial, more macroeconomic suggestions that were postponed for Seoul which I will not discuss in great detail. All in all, the agenda looks again encouraging, relevant and consistent. If well managed, this agenda could result in truly new financial system. However, the bad news is that the Obamas, Merkels and Hus of the world do not have any real intention to address this agenda.

Instead, the preparatory meeting in Gyeongju, South Korea, revealed what the true focus of the discussion is going to be currencies and trade deficits. While currencies and trade deficits are relevant and timely, they are not the topics that G20 Summits are intended to address. It seems that once again the crisis du jour will dominate, distracting our leaders from discussions that could bring about deep and lasting reform.

I’m willing to make a bet: On November 12, the Seoul Summit will end up with a mere declaration of intentions on a new currency system and an extensive to-do-list which will undoubtedly refer once again to green recovery, hedge fund supervision and control, OTC derivatives…until the next one.

Arturo Bris is Professor of Finance at IMD. He directs IMD’s Advanced Strategic Management program and also teaches on the following programs: Orchestrating Winning Performance, Strategic Finance, Building on Talent and the Program for Executive Development.