1. We, the leaders of the Group of Twenty, met in London on April 2, 2009.
2. We face the greatest challenge to the world economy in modern times; a
crisis which has deepened since we last met, which affects the lives of women,
men, and children in every country, and which all countries must join together
to resolve. A global crisis requires a global solution.
3. We start from the belief that prosperity is indivisible; that growth, to be
sustained, has to be shared; and that our global plan for recovery must have at
its heart the needs and jobs of hard-working families, not just in developed
countries but in emerging markets and the poorest countries of the world too;
and
must reflect the interests, not just of today's population, but of future
generations too. We believe that the only sure foundation for sustainable
globalization and rising prosperity for all is an open world economy based on
market principles, effective regulation, and strong global institutions.
4. We have today therefore pledged to do whatever is necessary to:
restore confidence, growth, and jobs;
repair the financial system to restore lending;
strengthen financial regulation to rebuild trust;
fund and reform our international financial institutions to overcome this
crisis and prevent future ones;
promote global trade and investment and reject protectionism, to underpin
prosperity; and
build an inclusive, green, and sustainable recovery.
By acting together to fulfill these pledges we will bring the world economy out
of recession and prevent a crisis like this from recurring in the future.
5. The agreements we have reached today, to treble resources available to the
IMF to $750 billion, to support a new SDR allocation of $250 billion, to
support at least $100 billion of additional lending by the MDBs, to ensure $250
billion of support for trade finance, and to use the additional resources from
agreed IMF gold sales for concessional finance for the poorest countries,
constitute an additional $1.1 trillion programme of support to restore credit,
growth and jobs in the world economy. Together with the measures we have each
taken nationally, this constitutes a global plan for recovery on an
unprecedented scale.
Restoring growth and jobs
6. We are undertaking an unprecedented and concerted fiscal expansion, which
will save or create millions of jobs which would otherwise have been destroyed,
and that will, by the end of next year, amount to $5 trillion, raise output by
4 per cent, and accelerate the transition to a green economy. We are committed
to deliver the scale of sustained fiscal effort necessary to restore growth.
7. Our central banks have also taken exceptional action. Interest rates have
been cut aggressively in most countries, and our central banks have pledged to
maintain expansionary policies for as long as needed and to use the full range
of monetary policy instruments, including unconventional instruments,
consistent with price stability.
8. Our actions to restore growth cannot be effective until we restore domestic
lending and international capital flows. We have provided significant and
comprehensive support to our banking systems to provide liquidity, recapitalize
financial institutions, and address decisively the problem of impaired assets.
We are committed to take all necessary actions to restore the normal flow of
credit through the financial system and ensure the soundness of systemically
important institutions, implementing our policies in line with the agreed G20
framework for restoring lending and repairing the financial sector.
9. Taken together, these actions will constitute the largest fiscal and
monetary stimulus and the most comprehensive support programme for the
financial sector in modern times. Acting together strengthens the impact and
the exceptional policy actions announced so far must be implemented without
delay. Today, we have further agreed over $1 trillion of additional resources
for the world economy through our international financial institutions and
trade finance.
10. Last month the IMF estimated that world growth in real terms would resume
and rise to over 2 percent by the end of 2010. We are confident that the
actions we have agreed today, and our unshakeable commitment to work together
to restore growth and jobs, while preserving long-term fiscal sustainability,
will accelerate the return to trend growth. We commit today to taking whatever
action is necessary to secure that outcome, and we call on the IMF to assess
regularly the actions taken and the global actions required.
11. We are resolved to ensure long-term fiscal sustainability and price
stability and will put in place credible exit strategies from the measures that
need to be taken now to support the financial sector and restore global demand.
We are convinced that by implementing our agreed policies we will limit the
longer-term costs to our economies, thereby reducing the scale of the fiscal
consolidation necessary over the longer term.
12. We will conduct all our economic policies cooperatively and responsibly
with regard to the impact on other countries and will refrain from competitive
devaluation of our currencies and promote a stable and well-functioning
international monetary system. We will support, now and in the future, to
candid, even-handed, and independent IMF surveillance of our economies and
financial sectors, of the impact of our policies on others, and of risks facing
the global economy.
Strengthening financial supervision and regulation
13. Major failures in the financial sector and in financial regulation and
supervision were fundamental causes of the crisis. Confidence will not be
restored until we rebuild trust in our financial system. We will take action to
build a stronger, more globally consistent, supervisory and regulatory
framework for the future financial sector, which will support sustainable
global growth and serve the needs of business and citizens.
14. We each agree to ensure our domestic regulatory systems are strong. But we
also agree to establish the much greater consistency and systematic cooperation
between countries, and the framework of internationally agreed high standards,
that a global financial system requires. Strengthened regulation and
supervision must promote propriety, integrity and transparency; guard against
risk across the financial system; dampen rather than amplify the financial and
economic cycle; reduce reliance on inappropriately risky sources of financing;
and discourage excessive risk-taking. Regulators and supervisors must protect
consumers and investors, support market discipline, avoid adverse impacts on
other countries, reduce the scope for regulatory arbitrage, support competition
and dynamism, and keep pace with innovation in the marketplace.
15. To this end we are implementing the Action Plan agreed at our last meeting,
as set out in the attached progress report. We have today also issued a
Declaration, Strengthening the Financial System. In particular we agree:
to establish a new Financial Stability Board (FSB) with a strengthened mandate,
as a successor to the Financial Stability Forum (FSF), including all G20
countries, FSF members, Spain, and the European Commission;
that the FSB should collaborate with the IMF to provide early warning of
macroeconomic and financial risks and the actions needed to address them;
to reshape our regulatory systems so that our authorities are able to identify
and take account of macro-prudential risks;
to extend regulation and oversight to all systemically important financial
institutions, instruments and markets. This will include, for the first time,
systemically important hedge funds;
to endorse and implement the FSF's tough new principles on pay and compensation
and to support sustainable compensation schemes and the corporate social
responsibility of all firms;
to take action, once recovery is assured, to improve the quality, quantity, and
international consistency of capital in the banking system. In future,
regulation must prevent excessive leverage and require buffers of resources to
be built up in good times;
to take action against non-cooperative jurisdictions, including tax havens. We
stand ready to deploy sanctions to protect our public finances and financial
systems. The era of banking secrecy is over. We note that the OECD has today
published a list of countries assessed by the Global Forum against the
international standard for exchange of tax information;
to call on the accounting standard setters to work urgently with supervisors
and regulators to improve standards on valuation and provisioning and achieve a
single set of high-quality global accounting standards; and
to extend regulatory oversight and registration to Credit Rating Agencies to
ensure they meet the international code of good practice, particularly to
prevent unacceptable conflicts of interest.
16. We instruct our Finance Ministers to complete the implementation of these
decisions in line with the timetable set out in the Action Plan. We have asked
the FSB and the IMF to monitor progress, working with the Financial Action
Taskforce and other relevant bodies, and to provide a report to the next
meeting of our Finance Ministers in Scotland in November.
Strengthening our global financial institutions
17. Emerging markets and developing countries, which have been the engine of
recent world growth, are also now facing challenges which are adding to the
current downturn in the global economy. It is imperative for global confidence
and economic recovery that capital continues to flow to them. This will require
a substantial strengthening of the international financial institutions,
particularly the IMF. We have therefore agreed today to make available an
additional $850 billion of resources through the global financial institutions
to support growth in emerging market and developing countries by helping to
finance counter-cyclical spending, bank recapitalization, infrastructure, trade
finance, balance of payments support, debt rollover, and social support. To
this end:
we have agreed to increase the resources available to the IMF through immediate
financing from members of $250 billion, subsequently incorporated into an
expanded and more flexible New Arrangements to Borrow, increased by up to $500
billion, and to consider market borrowing if necessary; and
we support a substantial increase in lending of at least $100 billion by the
Multilateral Development Banks (MDBs), including to low income countries, and
ensure that all MDBs, including have the appropriate capital.
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