We, the G8 Finance Ministers, remain focused on addressing the ongoing global economic and financial crisis. We have taken forceful and coordinated action to stabilize the financial sector and provide stimulus to restore economic growth and there are signs of stabilization in our economies, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence, but the situation remains uncertain and significant risks remain to economic and financial stability.
Even after output growth begins picking up, unemployment may continue to increase. Our countries will continue to implement actions to reduce the impact of the crisis on employment and maximise the potential for growth in jobs in the period of economic recovery, including by promoting targeted active labor market policies, enhancing skills development, ensuring effective social protection systems and enabling labor markets to respond to broader structural changes.
We must remain vigilant to ensure that consumer and investor confidence is fully restored and that growth is underpinned by stable financial markets and strong fundamentals.
We will continue working with others, taking the necessary steps to put the global economy on a strong, stable and sustainable growth path, including by continuing to provide macroeconomic stimulus consistent with price stability and medium-term fiscal sustainability, and restore lending. We reaffirm our commitment to address liquidity and capital needs of banks, as necessary, and to take all necessary actions to ensure the soundness of systemically important institutions.
We discussed the need to prepare appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured. These ”exit strategies” which may vary from country to country are essential to promote a sustainable recovery over the long-term.
We asked the IMF to undertake the necessary analytical work to assist us with this process.
While the stabilization of the economy over the short term is critical, we also discussed other challenges ahead of us.
The crisis has revealed that there are some fundamental weaknesses in the global economy related to propriety, integrity and transparency. To address these issues in a comprehensive fashion, we agreed on the need to develop the Lecce Framework - a set of common principles and standards governing the conduct of international business and finance - which builds on existing initiatives and lays the foundation for a stable growth path over the long term.
We are committed to working with our international partners to make progress with this initiative, with a view to reaching out to broader fora, including the G20 and beyond.
We discussed regulatory reform in our countries and at the international level. We are swiftly implementing the decisions taken at the London Summit and call on others to join our efforts to ensure global financial stability and an international level playing field.
We urge the relevant international institutions to closely monitor the implementation of these decisions and we also call on the FSB to develop a toolbox of measures to promote the adherence to prudential standards in cooperation with jurisdictions.
We welcome progress in negotiations of agreements on the exchange of information for tax purposes. We urge further progress in the implementation of the OECD standards and the involvement of the widest possible number of jurisdictions, including developing countries. It is also essential to develop an effective peer review mechanism to assess compliance with the same standards. This could be delivered by an expanded Global Forum.
We also look forward to an update on progress on the G20 agreement to tackle tax havens at the OECD Ministerial meeting.
We welcome FATF engagement with the G20 to fight against money laundering and the financing of terrorism. We are also committed to working with FATF on improving international standards and their global implementation, including preparation for the next round of mutual evaluations, promoting international cooperation and reinforcing actions on jurisdictions with vulnerabilities.
FATF should report back by September on its progress in identifying uncooperative jurisdictions.
We endorse the FATF’s call for countries to protect the financial system from illicit financing and implement counter-measures against Iran, in particular to mitigate the risk posed by correspondent relationships with Iranian financial institutions.
We are committed to the effective and timely implementation of financial measures against North Korea as set out, among other measures, in UN Security Council resolution N.1874.
To facilitate the recovery and sustain growth over the longer term, we reaffirm our commitment to refrain from protectionism and we commit to continue working towards an ambitious conclusion of the Doha round.
The rapid implementation of the trade finance support announced in April in London is essential in restoring international trade flows, particularly to emerging and developing countries.
Excess volatility of commodity prices poses risks to growth. We will consider ways to improve the functioning and transparency of global commodity markets, including considering IOSCO work on commodity derivative markets.
We have led efforts to provide the IMF with the necessary resources to expand its lending capacity and are fully committed to swiftly implement the London Summit commitment, and urge other countries to participate.
We are also exploring ways to substantially increase the IMF capacity for concessional lending through the sale of gold or other means, consistent with the new income model, and we encourage the Fund to explore the scope for increased concessionality to low-income countries. We remain committed to reforming the IMF to enable it to carry out its critical role in the modern global economy. We welcome the actions taken by the World Bank and other Multilateral Development Banks (MDBs) that highlight their important countercyclical role in responding to the global crisis.
Even after output growth begins picking up, unemployment may continue to increase. Our countries will continue to implement actions to reduce the impact of the crisis on employment and maximise the potential for growth in jobs in the period of economic recovery, including by promoting targeted active labor market policies, enhancing skills development, ensuring effective social protection systems and enabling labor markets to respond to broader structural changes.
We must remain vigilant to ensure that consumer and investor confidence is fully restored and that growth is underpinned by stable financial markets and strong fundamentals.
We will continue working with others, taking the necessary steps to put the global economy on a strong, stable and sustainable growth path, including by continuing to provide macroeconomic stimulus consistent with price stability and medium-term fiscal sustainability, and restore lending. We reaffirm our commitment to address liquidity and capital needs of banks, as necessary, and to take all necessary actions to ensure the soundness of systemically important institutions.
We discussed the need to prepare appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured. These ”exit strategies” which may vary from country to country are essential to promote a sustainable recovery over the long-term.
We asked the IMF to undertake the necessary analytical work to assist us with this process.
While the stabilization of the economy over the short term is critical, we also discussed other challenges ahead of us.
The crisis has revealed that there are some fundamental weaknesses in the global economy related to propriety, integrity and transparency. To address these issues in a comprehensive fashion, we agreed on the need to develop the Lecce Framework - a set of common principles and standards governing the conduct of international business and finance - which builds on existing initiatives and lays the foundation for a stable growth path over the long term.
We are committed to working with our international partners to make progress with this initiative, with a view to reaching out to broader fora, including the G20 and beyond.
We discussed regulatory reform in our countries and at the international level. We are swiftly implementing the decisions taken at the London Summit and call on others to join our efforts to ensure global financial stability and an international level playing field.
We urge the relevant international institutions to closely monitor the implementation of these decisions and we also call on the FSB to develop a toolbox of measures to promote the adherence to prudential standards in cooperation with jurisdictions.
We welcome progress in negotiations of agreements on the exchange of information for tax purposes. We urge further progress in the implementation of the OECD standards and the involvement of the widest possible number of jurisdictions, including developing countries. It is also essential to develop an effective peer review mechanism to assess compliance with the same standards. This could be delivered by an expanded Global Forum.
We also look forward to an update on progress on the G20 agreement to tackle tax havens at the OECD Ministerial meeting.
We welcome FATF engagement with the G20 to fight against money laundering and the financing of terrorism. We are also committed to working with FATF on improving international standards and their global implementation, including preparation for the next round of mutual evaluations, promoting international cooperation and reinforcing actions on jurisdictions with vulnerabilities.
FATF should report back by September on its progress in identifying uncooperative jurisdictions.
We endorse the FATF’s call for countries to protect the financial system from illicit financing and implement counter-measures against Iran, in particular to mitigate the risk posed by correspondent relationships with Iranian financial institutions.
We are committed to the effective and timely implementation of financial measures against North Korea as set out, among other measures, in UN Security Council resolution N.1874.
To facilitate the recovery and sustain growth over the longer term, we reaffirm our commitment to refrain from protectionism and we commit to continue working towards an ambitious conclusion of the Doha round.
The rapid implementation of the trade finance support announced in April in London is essential in restoring international trade flows, particularly to emerging and developing countries.
Excess volatility of commodity prices poses risks to growth. We will consider ways to improve the functioning and transparency of global commodity markets, including considering IOSCO work on commodity derivative markets.
We have led efforts to provide the IMF with the necessary resources to expand its lending capacity and are fully committed to swiftly implement the London Summit commitment, and urge other countries to participate.
We are also exploring ways to substantially increase the IMF capacity for concessional lending through the sale of gold or other means, consistent with the new income model, and we encourage the Fund to explore the scope for increased concessionality to low-income countries. We remain committed to reforming the IMF to enable it to carry out its critical role in the modern global economy. We welcome the actions taken by the World Bank and other Multilateral Development Banks (MDBs) that highlight their important countercyclical role in responding to the global crisis.
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