Investadvisor

World leaders pledged to shore up global growth, avoid protectionism and move quickly on global regulatory reform at the conclusion of the Group of 20 summit in Washington at the weekend.

Presenting a united front in the face of the economic crisis, leaders from both developed and developing nations promised to take “whatever further actions are necessary to stabilise the financial system” and said they would “use fiscal measures to stimulate domestic demand to rapid effect, as appropriate”.

People at the talks said the statement would give fresh momentum to national stimulus packages, in particular in the UK and continental Europe.

Leaders said they would require regulators to set up “colleges of supervisors” to monitor global banks and said ministers would report back by March 31 on issues such as strengthening of the credit derivatives markets, review of financial sector pay schemes, and valuation of complex securities.

European leaders claimed the plan represented a broadly European reform agenda, while the US emphasised the summit commitment to pro-market principles. Both US and non-US officials said the outcome of the process set in train by the summit would depend on what the incoming Obama administration – which takes office on January 20 – decided to do.

The industrialised economies agreed to open up membership of key standards-setting bodies, including the Financial Stability Forum, to emerging economies such as China and India, and promised to increase their say at the International Monetary Fund.

The G20 heads of government – who were meeting for the first time – pledged to meet again by next April.

Robert Zoellick, the president of the World Bank, who warned the world leaders that a drying up of credit could lead to a “huge drop in trade” told the FT the G20 recognised they faced “a global crisis that is going to need a global response”.

The G20 promised not to adopt any new protectionist measures, and pledged a fresh effort to revive the Doha round of trade talks. World leaders also pledged to ensure that developing nations caught up in the crisis have access to dollar finance.

source:www.ft.com