G20 finance ministers and central bank governors reached a “strong consensus on the need for both recovery and for reform” to deal with the current global economic recession, says U.S. Treasury Secretary Timothy Geithner.
The finance ministers and central bankers said in a joint communiqué March 14 that they “are prepared to take whatever action is necessary until growth is restored.” The ministers and bankers met March 13-14 in London to set a common agenda for a summit of G20 leaders on April 2, also in London.
“This is a global crisis, and it requires a coordinated global response,” Geithner said March 14. “It requires aggressive actions to fix our financial systems and get credit flowing again.”
In the joint communiqué, the finance ministers and central bankers agreed the International Monetary Fund (IMF) and other international financial institutions must increase their lending capacity as soon as possible to help emerging and developing economies that are facing the most urgent need for fresh funds.
Exact amount unknown
The G20 also agreed with a plan floated by the United States to boost an emergency fund the IMF uses to assist troubled national economies, though the exact amount was left open for summit leaders to decide. “The G20 supports our proposal for a substantial increase in the emergency resources for the IMF and an expansion of its membership,” Geithner said March 15 at a post-meeting press conference in London.
In addition, the communiqué said the G20 central banks have aggressively cut interest rates in most countries, and the central banks will maintain these policies as long as needed to support credit needs.
The communiqué also called for the IMF to assess the actions that have been taken by individual G20 nations to stimulate their economies and determine if more is required. The United States had hoped the G20 would take a stronger stance for expanded economic stimulus plans similar to the $787 billion plan implemented by the United States.
Geithner said the G20 has agreed to a comprehensive plan of regulatory reforms for financial markets including hedge funds, and a system of registration and oversight of all credit rating agencies.
“We must establish a much stronger form of oversight and clear rules of the game more evenly enforced across the international financial system,” Geithner said.
Finally, the G20 ministers and bankers said that they would commit to fighting all forms of trade protectionism and maintain open trade and investment.
Africa News Report