06/19/2012 10:07 am ET Updated Aug 19, 2012

Can G20 Summits Deliver Financial Reform?

In 1975 heads of state from six countries met for a fireside chat in a French castle to fix the world economy. As 20 world leaders meet in a Mexican resort this week the number and the location have changed, but the situation and the level of expectation have not.

The problem summits face in trying to exude a sense of accomplishment is that promises to act become weaker if the action promised is never delivered.

This week we again turn to the G20 in the hope of seeing measures to restore global economic stability.

One aspect of the G20's response to the financial crisis has been a commitment to address the lack of transparency that contributed to it with a strong plan of action to deal with corruption and its various manifestations.

At the November 2010 Seoul summit, the agreed plan covered a broad swath of action: from tackling financial crimes like money laundering and bribery, to improving protection for people exposed to reprisals if they blow the whistle on problems such as dodgy bank loans.

Importantly, the plan if implemented would bring badly needed improvements to regulation of the international financial system, with more transparent management of public finances, more transparency on financial vehicles, such as trusts, misused to conceal their true nature and their owners, better oversight of illicit cross border financial flows, stronger watchdogs and greater cooperation between officials. It would also help countries dealing with corruption, allowing faster recovery of stolen assets and sanctioning of corrupt officials.

This action plan left the fireside chat far behind. The G20 has set up the Anti-Corruption Working Group to monitor whether the goals are actually met. The group sets benchmarks for members and publishes annual progress reports. Its role will continue to be vital for years to come.

The G20's Anti-Corruption Working Group could be a model for more accountable and effective follow-up on summit commitments. It has been an effective means of keeping commitments on the front burner, instead of letting them slip to the back. At the last summit, for example, its progress report praised South Korea for changing its laws to protect whistleblowers, while showing that seven more countries still have gaps.

Some of the achievements constitute first steps towards the comprehensive financial reform widely expected after the financial crisis began in 2008.

One achievement is committing to the OECD's Model Convention on sharing taxpayer information. This will provide a common understanding for authorities to work together when tackling global financial crime: the money launderers and tax dodgers.

The model convention provides a single legal umbrella under which it is easier for tax officials to work together in tackling cross-border financial crime.

Another positive step is the toughening up of the standards of the Financial Action Task Force, an anti-money laundering watch dog. The G20 has empowered officials tackling money laundering to also prosecute tax evaders, by expanding the definition of money laundering to include tax evasion. Until now, tax crimes did not give rise to the offense of money laundering.

However, despite the work already initiated, a lot remains to do.

One of the G20's first public promises was to end "the era of bank secrecy." Three years later, bank deposits held by foreigners in tax havens are at the same level as 2007, roughly US $2.7 trillion, according to the Bank for International Settlements.

We are still waiting for the G20 to demand registers of who really owns and profits from companies and trusts established in tax havens.

They must also make sure that sanction outweighs profit for banks failing to carry out extra due diligence on officials and politicians bringing money that bears the suspicion of being ill-gotten, a number of banks in G20 countries fall under that category.

These problems are not restricted to G20 countries -- they affect the entire financial system. But collective G20 action can have a wide impact by showing leadership. If all G20 members denied corrupt officials entry to their country -- something that nine countries have already done according to the anti-corruption working group -- that would be a powerful disincentive to get caught with your hand in the public till.

These steps, crucial to stabilizing the financial system, could be achieved through the G20's Anti-Corruption Action Plan and Working Group.

The impact of financial crime is vast and pernicious and affects all peoples, especially the most vulnerable in our society. It affects world stability and undermines trust and confidence in financial system and in governments and political leaders. Summit 44, this year under Mexican leadership, should send a strong message that the G20 countries are acting on their Anti-Corruption Action Plan.