Summit pledge to restore growth and tighten up oversight

publication date: Nov 17, 2008

World leaders meeting at the recent G20 financial summit in Washington – which brought together leading industrial powers alongside emerging market countries such as China, India, Argentina, Brazil and others, (representing 85% of the world economy) -  pledged to work together to restore global growth. Saying they were determined to work together to achieve "needed reforms" in the world's financial systems, US President George W Bush stated that finance ministers would now work on detailed reform proposals, and then report back.

Key issues agreed by world leaders at the summit included:

• Reform of international financial institutions such as the World Bank and the International Monetary Fund

• An agreement by the end of 2008, leading to a successful global free-trade deal

• Improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions

• Making sure banks and financial institutions' incentives "prevent excessive risk taking"

• Asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system

• Strengthening countries' financial regulatory regimes

• Taking a "fresh look" at rules that govern market manipulation and fraud

For his part, UK Prime Minister, Gordon Brown, said agreements made at the summit provide a "route map" to economic recovery. Brown hailed as "historic" the countries' vow to act together to reverse the global economic slump: "By the actions we take, savings are safe, people will be able to keep their jobs, they will not lose their homes in all of our countries”, he said, adding: "These are extraordinary times and they require extraordinary measures."

Following the talks, Christine Lagarde, (PICTURED) the French Finance Minister, described the outcome as “…a checklist ... that clearly we are trying to push at the global level and on which there was massive support within the group this morning.” The proposals set out by the EU would seek to curb “short-termism” in markets, improve accountability and transparency, and better anticipate financial threats. The plan would also give emerging market nations such as China and India a bigger say in the operations of the IMF and other global institutions, and calls for increased oversight of credit ratings agencies and accounting rule-setters. However, it stops short of direct moves to regulate hedge funds and private equity groups.