An important milestone has been reached on the road to the London Summit, with a successful meeting of the Finance Ministers and Central Bank Governors of the G20 countries at Horsham in Southern England. The communiqué issued on Saturday afternoon showed progress on the main issues on the agenda for the summit on 2nd April, with agreement on action to restore global growth and restore lending by the world’s banks.
The first point in the communiqué was a ringing endorsement of the importance of maintaining free trade, with a commitment to fight `all forms of protectionism’. Fiscal expansion was providing vital support for growth and jobs, the communiqué said, pledging to deliver `the scale of sustained effort necessary to restore growth’. The central bankers said they would maintain expansionary monetary policies, consistent with price stability.
Developing and emerging countries were promised several measures to help them cope with the reversal in international capital flows. Reform of the international financial institutions was also included, with measures to strengthen the voice and representation of the emerging and developing countries, tied to firm deadlines. There was agreement on the need to increase the resources of the International Monetary Fund, as well as support for other international institutions.
Several measures were recommended to strengthen the financial system, including appropriate regulation and oversight of all `systemically important financial institutions, markets and instruments’, which would cover hedge funds and derivatives. Financial regulations should be reassessed to ensure they dampen rather than amplify economic cycles, with strengthened international cooperation on financial regulation. Regulation of credit rating agencies was part of a series of proposals to ensure greater transparency in the financial sector.
The first point in the communiqué was a ringing endorsement of the importance of maintaining free trade, with a commitment to fight `all forms of protectionism’. Fiscal expansion was providing vital support for growth and jobs, the communiqué said, pledging to deliver `the scale of sustained effort necessary to restore growth’. The central bankers said they would maintain expansionary monetary policies, consistent with price stability.
Developing and emerging countries were promised several measures to help them cope with the reversal in international capital flows. Reform of the international financial institutions was also included, with measures to strengthen the voice and representation of the emerging and developing countries, tied to firm deadlines. There was agreement on the need to increase the resources of the International Monetary Fund, as well as support for other international institutions.
Several measures were recommended to strengthen the financial system, including appropriate regulation and oversight of all `systemically important financial institutions, markets and instruments’, which would cover hedge funds and derivatives. Financial regulations should be reassessed to ensure they dampen rather than amplify economic cycles, with strengthened international cooperation on financial regulation. Regulation of credit rating agencies was part of a series of proposals to ensure greater transparency in the financial sector.
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