fresh voices from the front lines of change







Here is a wrap-up on the G20 Summit.

On the ground:

The thing that stands out in my mind from actually being in Pittsburgh while the summit took place is the way the city reacted. The city was literally deserted, buildings were barricaded as if the Chinese or Russian army was expected to invade, with tanks. Buildings were surrounded by concrete barricades — the kind that are placed between traffic lanes on highways. (See picture) One newscast interviewed a resident who said it was like being in a science fiction movie. I suspect this extreme overreaction was brought about by sensationalized local news broadcasts — the same kind of thing that makes parents afraid to let children walk to school anymore. It was clear that the locals had been scared witless. So millions were spent on anti-terrorist precautions, thousands of police were brought in from cities across the whole East Coast and Midwest, businesses closed and the city’s working people lost two days pay.

I took these pictures near the trolley station clear on the other side of town from the convention center, illustrating extreme anti-tank precautions that were placed around buildings throughout the city. The thing is, these barricades might stop tanks, but not protesters.

Will stop tanks, but protesters can just run between them.

I’m not clear on the threat they are protecting this obscure building from.

Then, when the big demonstration actually happened – The People’s March – it was just a bunch of regular people and a hew hippies, walking through town. Big deal. But the police treated these people as hardened criminals and the level of precautions forced everyone observing the event to conclude that this form of democratic engagement is a threat to the existing order on a scale beyond even the 9/11 attacks.

There is no way around it, simple democracy in which regular people express their views is perceived by those at the top as a very dangerous threat. They seem to want their “experts” making decisions, regardless of their records.

Later, G-20 lockdown gone, Pittsburgh gets back to normal,

Many downtown businesses closed voluntarily, some of the smaller ones boarding their windows with plywood.

Bill Martinko, owner of Galardi’s 30-Minute Cleaners, now wonders if he should have bothered. “I thought it would have been really bad, but nothing happened downtown at all,” he said. “I wasted all that money boarding up.”

The Summit:

So how did the Summit turn out? First observation: It is refreshing to see that we have an administration interested in participating in the world again.

The leaders communique is reprinted below and it is well worth reading. There are many things in this agreement that will very much surprise you. When you read what is said in this agreement and realize the countries that signed on to it, it will challenge many things about the world’s economies that you through you knew. It appears that this economic crisis has changed the ideas in many countries. To the extent that these agreement are implemented, the world will be a better place. As long as this is not just talk, and as long as the forces of wealthy entrenched intrerests do not block implementation, then this is a step forward.

However, some of this document reflects an elite leadership view of “free” markets and trade, though, and we will have to see how it is implemented. For example, they agree to fight “protectionism” but the word is not defined.

A summary of what is in the communique: They agreed to replace the G7 with this G20 group which brings in emerging economies including China, Brazil and India. G20 will now function as a sort of world economy governing body.

They agreed to start rebalancing trade, and in particular China will start depending less on exports and the US will stop depending so much on imports and borrowed money. They agreed to change the way bankers are compensated, requiring longer-term performance measures. They agreed to come up with a stronger regulatory framework for the financial industry including new global accounting standards and fighting tax havens including “countermeasures” as of March 2010. They agreed to review each other’s economic policies. They outlined a number of steps to reduce world poverty including Energy for the Poor initiatives and recovering and returning stolen assets to poor countries.

Climate: They agreed to phase out any existing subsidies for fossil fuels and increase energy market transparency to help fight climate change, with a report on all such subsidies in existence by the next summit. (They say that eliminating these subsidies alone reduces carbon emissions by 10%.) They agreed to promote clean energy and green jobs as part of their economic recovery efforts.

This one is promising, the agreement calls for “Modernizing the international financial institutions and global development architecture is essential to our efforts to promote global financial stability, foster sustainable development, and lift the lives of the poorest.”

What’s Missing:


The statement fights the last war – the great depression. It announces frameworks, brags about the support they are giving the banking system, and puts “quality jobs at the heart of the recovery” and says things like “As growth returns, every country must act to ensure that employment recovers quickly” and talks about creating a “more inclusive labor markets” and job training programs but it doesn’t say anything about programs for creating jobs now for the people of the world. It seems that for the world’s leaders, not just our own, bailing out bankers is more important than providing jobs!

Other reactions:

Reuters, G20 faces credibility test on markets

“There are a lot of cooks in the kitchen … I would wait until we declare victory,” said Simon Johnson, a former chief economist of the International Monetary Fund. “They have to prove their value and legitimacy.”

NPR Segment: Big Words From G-20, But How Much Action?

In Pittsburgh, the G-20 nations breathed a sigh of relief and patted themselves on the back in a communique that said their many economic policy interventions had “worked.” They agreed that banks should beef up their capital reserves and reform their compensation systems. But there wasn’t much in the way of enforcement mechanisms.

Michael Brenner, Much Ado About Almost Nothing

Regulation of CDOs, CDSs, over leveraging, too big to fail financial institutions, etc never made it onto the agenda. The blood oaths of November and April to tackle head-on the practices that brought us to the brink of disaster evidently are gone with the wind.

Ann Pettifor at Huffington Post, The G20: Rebooting the System,

“Taken together,” declared the G20 on Friday, “these actions will constitute the largest fiscal and monetary stimulus and the most comprehensive support program for the financial sector in modern times.”

You heard that the first time. For the financial sector. Not for suckers like you and me.

John Nichols writes at The Nation that G20 Schemes Threaten Democracy, Sustainability:

The thing to remember is that, in the world of the global economic elites, “sustainable” has a different meaning than in does at a Friends of the Earth rally or the local farmers’ market.

The high fliers at the G-20 want to manage international trade and competition in a manner that keeps banks and corporations on steady growth trajectories – no matter what that means for working families, small farmers and the poor of the planet. In other words, they’re talking about sustaining status-quo economics.

Finally, here is the concluding statement from the G20:

Leaders’ Statement: The Pittsburgh Summit, September 24 – 25, 2009


1. We meet in the midst of a critical transition
from crisis to recovery to turn the page on an era of irresponsibility
and to adopt a set of policies, regulations and reforms to meet the
needs of the 21st century global economy.

2. When we last gathered in April, we confronted the greatest challenge to the world economy in our generation.

3. Global output was contracting at pace not seen since the 1930s. Trade
was plummeting. Jobs were disappearing rapidly. Our people worried that
the world was on the edge of a depression.
4. At that time,
our countries agreed to do everything necessary to ensure recovery, to
repair our financial systems and to maintain the global flow of
5. It worked.

6. Our forceful response helped
stop the dangerous, sharp decline in global activity and stabilize
financial markets. Industrial output is now rising in nearly all our
economies. International trade is starting to recover. Our financial
institutions are raising needed capital, financial markets are showing
a willingness to invest and lend, and confidence has improved.

7. Today, we reviewed the progress we have made since the London Summit in
April. Our national commitments to restore growth resulted in the
largest and most coordinated fiscal and monetary stimulus ever
undertaken. We acted together to increase dramatically the resources
necessary to stop the crisis from spreading around the world. We took
steps to fix the broken regulatory system and started to implement
sweeping reforms to reduce the risk that financial excesses will again
destabilize the global economy.

8. A sense of normalcy should not lead to complacency.

9. The process of recovery and repair remains incomplete. In many
countries, unemployment remains unacceptably high. The conditions for a
recovery of private demand are not yet fully in place. We cannot rest
until the global economy is restored to full health, and hard-working
families the world over can find decent jobs.

10. We pledge
today to sustain our strong policy response until a durable recovery is
secured. We will act to ensure that when growth returns, jobs do too.
We will avoid any premature withdrawal of stimulus. At the same time,
we will prepare our exit strategies and, when the time is right,
withdraw our extraordinary policy support in a cooperative and
coordinated way, maintaining our commitment to fiscal responsibility.

11. Even as the work of recovery continues, we pledge to adopt the policies
needed to lay the foundation for strong, sustained and balanced growth
in the 21st century. We recognize that we have to act
forcefully to overcome the legacy of the recent, severe global economic
crisis and to help people cope with the consequences of this crisis. We
want growth without cycles of boom and bust and markets that foster
responsibility not recklessness.

12. Today we agreed:

13. To launch a framework that lays out the policies and the way we act
together to generate strong, sustainable and balanced global growth
. We need a durable recovery that creates the good jobs our people need.

14. We need to shift from public to
private sources of demand, establish a
pattern of growth across countries that is more sustainable and
balanced, and reduce development imbalances. We pledge to avoid
destabilizing booms and busts in asset and credit prices and adopt
macroeconomic policies, consistent with price stability, that promote
adequate and balanced global demand. We will also make decisive
progress on structural reforms that foster private demand and
strengthen long-run growth potential.

15. Our Framework for
Strong, Sustainable and Balanced Growth is a compact that commits us to
work together to assess how our policies fit together, to evaluate
whether they are collectively consistent with more sustainable and
balanced growth, and to act as necessary to meet our common objectives.

16. To make sure our regulatory system for banks and other financial firms reins in the excesses that led to the crisis. Where reckless behavior and a lack of responsibility led to crisis, we will not allow a return to banking as usual.

17. We committed to act together to raise capital standards, to implement
strong international compensation standards aimed at ending practices
that lead to excessive risk-taking, to improve the over-the-counter
derivatives market and to create more powerful tools to hold large
global firms to account for the risks they take. Standards for large
global financial firms should be commensurate with the cost of their
failure. For all these reforms, we have set for ourselves strict and
precise timetables.

18. To reform the global architecture to meet the needs of the 21st century.
After this crisis, critical players need to be at the table and fully
vested in our institutions to allow us to cooperate to lay the
foundation for strong, sustainable and balanced growth.

19. We designated the G-20 to be the premier forum for our international
economic cooperation. We established the Financial Stability Board
(FSB) to include major emerging economies and welcome its efforts to
coordinate and monitor progress in strengthening financial regulation.

20. We are committed to a shift in International Monetary Fund (IMF) quota
share to dynamic emerging markets and developing countries of at least
5% from over-represented countries to under-represented countries using
the current quota formula as the basis to work from. Today we have
delivered on our promise to contribute over $500 billion to a renewed
and expanded IMF New Arrangements to Borrow (NAB).

21. We stressed the importance of adopting a dynamic formula at the World Bank
which primarily reflects countries’ evolving economic weight and the
World Bank’s development mission, and that generates an increase of at
least 3% of voting power for developing and transition countries, to
the benefit of under-represented countries. While recognizing that
over-represented countries will make a contribution, it will be
important to protect the voting power of the smallest poor countries.
We called on the World Bank to play a leading role in responding to
problems whose nature requires globally coordinated action, such as
climate change and food security, and agreed that the World Bank and
the regional development banks should have sufficient resources to
address these challenges and fulfill their mandates.

22. To take new steps to increase access to food, fuel and finance among the world’s poorest while clamping down on illicit outflows. Steps to reduce the development gap can be a potent driver of global growth.

23. Over four billion people remain undereducated, ill-equipped with
capital and technology, and insufficiently integrated into the global
economy. We need to work together to make the policy and institutional
changes needed to accelerate the convergence of living standards and
productivity in developing and emerging economies to the levels of the
advanced economies. To start, we call on the World Bank to develop a
new trust fund to support the new Food Security Initiative for
low-income countries announced last summer. We will increase, on a
voluntary basis, funding for programs to bring clean affordable energy
to the poorest, such as the Scaling Up Renewable Energy Program.

24. To phase out and rationalize over the medium term inefficient fossil fuel
subsidies while providing targeted support for the poorest
Inefficient fossil fuel subsidies encourage wasteful consumption,
reduce our energy security, impede investment in clean energy sources
and undermine efforts to deal with the threat of climate change.

25. We call on our Energy and Finance Ministers to report to us their
implementation strategies and timeline for acting to meet this critical
commitment at our next meeting.

26. We will promote energy market transparency and market stability as part of our broader effort
to avoid excessive volatility.

27. To maintain our openness and move toward greener, more sustainable growth.

28. We will fight protectionism. We are committed to bringing the Doha Round to a successful conclusion in 2010.

29. We will spare no effort to reach agreement in Copenhagen through the
United Nations Framework Convention on Climate Change (UNFCCC)

30. We warmly welcome the report by the Chair of the London Summit commissioned at our last meeting and published today.

31. Finally, we agreed to meet in Canada in June 2010 and in Korea in
November 2010. We expect to meet annually thereafter and will meet in
France in 2011.

* * *
1. We assessed the progress we have
made together in addressing the global crisis and agreed to maintain
our steps to support economic activity until recovery is assured. We
further committed to additional steps to ensure strong, sustainable,
and balanced growth, to build a stronger international financial
system, to reduce development imbalances, and to modernize our
architecture for international economic cooperation.

A Framework for Strong, Sustainable, and Balanced Growth

2. The growth of the global economy and the success of our coordinated
effort to respond to the recent crisis have increased the case for more
sustained and systematic international cooperation. In the short-run,
we must continue to implement our stimulus programs to support economic
activity until recovery clearly has taken hold. We also need to develop
a transparent and credible process for withdrawing our extraordinary
fiscal, monetary and financial sector support, to be implemented when
recovery becomes fully secured. We task our Finance Ministers, working
with input from the IMF and FSB, at their November meeting to continue
developing cooperative and coordinated exit strategies recognizing that
the scale, timing, and sequencing of this process will vary across
countries or regions and across the type of policy measures. Credible
exit strategies should be designed and communicated clearly to anchor
expectations and reinforce confidence.

3. The IMF estimates
that world growth will resume this year and rise by nearly 3% by the
end of 2010. Subsequently, our objective is to return the world to
high, sustainable, and balanced growth, while maintaining our
commitment to fiscal responsibility and sustainability, with reforms to
increase our growth potential and capacity to generate jobs and
policies designed to avoid both the re-creation of asset bubbles and
the re-emergence of unsustainable global financial flows. We commit to
put in place the necessary policy measures to achieve these outcomes.

4. We will need to work together as we manage the transition to a more
balanced pattern of global growth. The crisis and our initial policy
responses have already produced significant shifts in the pattern and
level of growth across countries. Many countries have already taken
important steps to expand domestic demand, bolstering global activity
and reducing imbalances. In some countries, the rise in private saving
now underway will, in time, need to be augmented by a rise in public
saving. Ensuring a strong recovery will necessitate adjustments across
different parts of the global economy, while requiring macroeconomic
policies that promote adequate and balanced global demand as well as
decisive progress on structural reforms that foster private domestic
demand, narrow the global development gap, and strengthen long-run
growth potential. The IMF estimates that only with such adjustments and
realignments, will global growth reach a strong, sustainable, and
balanced pattern. While governments have started moving in the right
direction, a shared understanding and deepened dialogue will help build
a more stable, lasting, and sustainable pattern of growth. Raising
living standards in the emerging markets and developing countries is
also a critical element in achieving sustainable growth in the global

5. Today we are launching a Framework for Strong,
Sustainable, and Balanced Growth. To put in place this framework, we
commit to develop a process whereby we set out our objectives, put
forward policies to achieve these objectives, and together assess our
progress. We will ask the IMF to help us with its analysis of how our
respective national or regional policy frameworks fit together. We will
ask the World Bank to advise us on progress in promoting development
and poverty reduction as part of the rebalancing of global growth. We
will work together to ensure that our fiscal, monetary, trade, and
structural policies are collectively consistent with more sustainable
and balanced trajectories of growth. We will undertake macro prudential
and regulatory policies to help prevent credit and asset price cycles
from becoming forces of destabilization. As we commit to implement a
new, sustainable growth model, we should encourage work on measurement
methods so as to better take into account the social and environmental
dimensions of economic development.

6. We call on our Finance
Ministers and Central Bank Governors to launch the new Framework by
November by initiating a cooperative process of mutual assessment of
our policy frameworks and the implications of those frameworks for the
pattern and sustainability of global growth. We believe that regular
consultations, strengthened cooperation on macroeconomic policies, the
exchange of experiences on structural policies, and ongoing assessment
will promote the adoption of sound policies and secure a healthy global
economy. Our compact is that:

  • G-20 members will agree on shared policy objectives. These objectives should be updated as conditions evolve.
  • G-20 members will set out our medium-term policy frameworks and will work
    together to assess the collective implications of our national policy
    frameworks for the level and pattern of global growth and to identify
    potential risks to financial stability.
  • G-20 Leaders will consider, based on the results of the mutual assessment, and agree any actions to meet our common objectives.

7. This process will only be successful if it is supported by candid,
even-handed, and balanced analysis of our policies. We ask the IMF to
assist our Finance Ministers and Central Bank Governors in this process
of mutual assessment by developing a forward-looking analysis of
whether policies pursued by individual G-20 countries are collectively
consistent with more sustainable and balanced trajectories for the
global economy, and to report regularly to both the G-20 and the
International Monetary and Financial Committee (IMFC), building on the
IMF’s existing bilateral and multilateral surveillance analysis, on
global economic developments, patterns of growth and suggested policy
adjustments. Our Finance Ministers and Central Bank Governors will
elaborate this process at their November meeting and we will review the
results of the first mutual assessment at our next summit.

8. These policies will help us to meet our responsibility to the community
of nations to build a more resilient international financial system and
to reduce development imbalances.

9. Building on Chancellor
Merkel’s proposed Charter, on which we will continue to work, we
adopted today Core Values for Sustainable Economic Activity, which will
include those of propriety, integrity, and transparency, and which will
underpin the Framework.

Strengthening the International Financial Regulatory System

10. Major failures of regulation and supervision, plus reckless and
irresponsible risk taking by banks and other financial institutions,
created dangerous financial fragilities that contributed significantly
to the current crisis. A return to the excessive risk taking prevalent
in some countries before the crisis is not an option.

11. Since the onset of the global crisis, we have developed and begun
implementing sweeping reforms to tackle the root causes of the crisis
and transform the system for global financial regulation. Substantial
progress has been made in strengthening prudential oversight, improving
risk management, strengthening transparency, promoting market
integrity, establishing supervisory colleges, and reinforcing
international cooperation. We have enhanced and expanded the scope of
regulation and oversight, with tougher regulation of over-the-counter
(OTC) derivatives, securitization markets, credit rating agencies, and
hedge funds. We endorse the institutional strengthening of the FSB
through its Charter, following its establishment in London, and welcome
its reports to Leaders and Ministers. The FSB’s ongoing efforts to
monitor progress will be essential to the full and consistent
implementation of needed reforms. We call on the FSB to report on
progress to the G-20 Finance Ministers and Central Bank Governors in
advance of the next Leaders summit.

12. Yet our work is not
done. Far more needs to be done to protect consumers, depositors, and
investors against abusive market practices, promote high quality
standards, and help ensure the world does not face a crisis of the
scope we have seen. We are committed to take action at the national and
international level to raise standards together so that our national
authorities implement global standards consistently in a way that
ensures a level playing field and avoids fragmentation of markets,
protectionism, and regulatory arbitrage. Our efforts to deal with
impaired assets and to encourage the raising of additional capital must
continue, where needed. We commit to conduct robust, transparent stress
tests as needed. We call on banks to retain a greater proportion of
current profits to build capital, where needed, to support lending.
Securitization sponsors or originators should retain a part of the risk
of the underlying assets, thus encouraging them to act prudently. It is
important to ensure an adequate balance between macroprudential and
microprudential regulation to control risks, and to develop the tools
necessary to monitor and assess the buildup of macroprudential risks in
the financial system. In addition, we have agreed to improve the
regulation, functioning, and transparency of financial and commodity
markets to address excessive commodity price volatility.

13. As we encourage the resumption of lending to households and businesses, we
must take care not to spur a return of the practices that led to the
crisis. The steps we are taking here, when fully implemented, will
result in a fundamentally stronger financial system than existed prior
to the crisis. If we all act together, financial institutions will have
stricter rules for risk-taking, governance that aligns compensation
with long-term performance, and greater transparency in their
operations. All firms whose failure could pose a risk to financial
stability must be subject to consistent, consolidated supervision and
regulation with high standards. Our reform is multi-faceted but at its
core must be stronger capital standards, complemented by clear
incentives to mitigate excessive risk-taking practices. Capital allows
banks to withstand those losses that inevitably will come. It, together
with more powerful tools for governments to wind down firms that fail,
helps us hold firms accountable for the risks that they take. Building
on their Declaration on Further Steps to Strengthen the International
Financial System, we call on our Finance Ministers and Central Bank
Governors to reach agreement on an international framework of reform in
the following critical areas:<

  • Building high quality capital and mitigating pro-cyclicality:
    We commit to developing by end-2010 internationally agreed rules to
    improve both the quantity and quality of bank capital and to discourage
    excessive leverage. These rules will be phased in as financial
    conditions improve and economic recovery is assured, with the aim of
    implementation by end-2012. The national implementation of higher level
    and better quality capital requirements, counter-cyclical capital
    buffers, higher capital requirements for risky products and off-balance
    sheet activities, as elements of the Basel II Capital Framework,
    together with strengthened liquidity risk requirements and
    forward-looking provisioning, will reduce incentives for banks to take
    excessive risks and create a financial system better prepared to
    withstand adverse shocks. We welcome the key measures recently agreed
    by the oversight body of the Basel Committee to strengthen the
    supervision and regulation of the banking sector. We support the
    introduction of a leverage ratio as a supplementary measure to the
    Basel II risk-based framework with a view to migrating to a Pillar 1
    treatment based on appropriate review and calibration. To ensure
    comparability, the details of the leverage ratio will be harmonized
    internationally, fully adjusting for differences in accounting. All
    major G-20 financial centers commit to have adopted the Basel II
    Capital Framework by 2011.
  • Reforming compensation practices to support financial stability:
    Excessive compensation in the financial sector has both reflected and
    encouraged excessive risk taking. Reforming compensation policies and
    practices is an essential part of our effort to increase financial
    stability. We fully endorse the implementation standards of the FSB
    aimed at aligning compensation with long-term value creation, not
    excessive risk-taking, including by (i) avoiding multi-year guaranteed
    bonuses; (ii) requiring a significant portion of variable compensation
    to be deferred, tied to performance and subject to appropriate clawback
    and to be vested in the form of stock or stock-like instruments, as
    long as these create incentives aligned with long-term value creation
    and the time horizon of risk; (iii) ensuring that compensation for
    senior executives and other employees having a material impact on the
    firm’s risk exposure align with performance and risk; (iv) making
    firms’ compensation policies and structures transparent through
    disclosure requirements; (v) limiting variable compensation as a
    percentage of total net revenues when it is inconsistent with the
    maintenance of a sound capital base; and (vi) ensuring that
    compensation committees overseeing compensation policies are able to
    act independently. Supervisors should have the responsibility to review
    firms’ compensation policies and structures with institutional and
    systemic risk in mind and, if necessary to offset additional risks,
    apply corrective measures, such as higher capital requirements, to
    those firms that fail to implement sound compensation policies and
    practices. Supervisors should have the ability to modify compensation
    structures in the case of firms that fail or require extraordinary
    public intervention. We call on firms to implement these sound
    compensation practices immediately. We task the FSB to monitor the
    implementation of FSB standards and propose additional measures as
    required by March 2010.
  • Improving over-the-counter derivatives markets:
    All standardized OTC derivative contracts should be traded on exchanges
    or electronic trading platforms, where appropriate, and cleared through
    central counterparties by end-2012 at the latest. OTC derivative
    contracts should be reported to trade repositories. Non-centrally
    cleared contracts should be subject to higher capital requirements. We
    ask the FSB and its relevant members to assess regularly implementation
    and whether it is sufficient to improve transparency in the derivatives
    markets, mitigate systemic risk, and protect against market abuse.
  • Addressing cross-border resolutions and systemically important financial institutions by end-2010:
    Systemically important financial firms should develop
    internationally-consistent firm-specific contingency and resolution
    plans. Our authorities should establish crisis management groups for
    the major cross-border firms and a legal framework for crisis
    intervention as well as improve information sharing in times of stress.
    We should develop resolution tools and frameworks for the effective
    resolution of financial groups to help mitigate the disruption of
    financial institution failures and reduce moral hazard in the future.
    Our prudential standards for systemically important institutions should
    be commensurate with the costs of their failure. The FSB should propose
    by the end of October 2010 possible measures including more intensive
    supervision and specific additional capital, liquidity, and other
    prudential requirements.

14. We call on our international
accounting bodies to redouble their efforts to achieve a single set of
high quality, global accounting standards within the context of their
independent standard setting process, and complete their convergence
project by June 2011. The International Accounting Standards Board’s
(IASB) institutional framework should further enhance the involvement
of various stakeholders.

15. Our commitment to fight
non-cooperative jurisdictions (NCJs) has produced impressive results.
We are committed to maintain the momentum in dealing with tax havens,
money laundering, proceeds of corruption, terrorist financing, and
prudential standards. We welcome the expansion of the Global Forum on
Transparency and Exchange of Information, including the participation
of developing countries, and welcome the agreement to deliver an
effective program of peer review. The main focus of the Forum’s work
will be to improve tax transparency and exchange of information so that
countries can fully enforce their tax laws to protect their tax base.
We stand ready to use countermeasures against tax havens from March
2010. We welcome the progress made by the Financial Action Task Force
(FATF) in the fight against money laundering and terrorist financing
and call upon the FATF to issue a public list of high risk
jurisdictions by February 2010. We call on the FSB to report progress
to address NCJs with regards to international cooperation and
information exchange in November 2009 and to initiate a peer review
process by February 2010.

16. We task the IMF to prepare a
report for our next meeting with regard to the range of options
countries have adopted or are considering as to how the financial
sector could make a fair and substantial contribution toward paying for
any burdens associated with government interventions to repair the
banking system.

Modernizing our Global Institutions to Reflect Today’s Global Economy

17. Modernizing the international financial institutions and global
development architecture is essential to our efforts to promote global
financial stability, foster sustainable development, and lift the lives
of the poorest. We warmly welcome Prime Minister Brown’s report on his
review of the responsiveness and adaptability of the international
financial institutions (IFIs) and ask our Finance Ministers to consider
its conclusions.

Reforming the Mandate, Mission and Governance of the IMF

18. Our commitment to increase the funds available to the IMF allowed it to
stem the spread of the crisis to emerging markets and developing
countries. This commitment and the innovative steps the IMF has taken
to create the facilities needed for its resources to be used
efficiently and flexibly have reduced global risks. Capital again is
flowing to emerging economies.

19. We have delivered on our
promise to treble the resources available to the IMF. We are
contributing over $500 billion to a renewed and expanded IMF New
Arrangements to Borrow (NAB). The IMF has made Special Drawing Rights
(SDR) allocations of $283 billion in total, more than $100 billion of
which will supplement emerging market and developing countries’
existing reserve assets. Resources from the agreed sale of IMF gold,
consistent with the IMF’s new income model, and funds from internal and
other sources will more than double the Fund’s medium-term concessional
lending capacity.

20. Our collective response to the crisis
has highlighted both the benefits of international cooperation and the
need for a more legitimate and effective IMF. The Fund must play a
critical role in promoting global financial stability and rebalancing
growth. We welcome the reform of IMF’s lending facilities, including
the creation of the innovative Flexible Credit Line. The IMF should
continue to strengthen its capacity to help its members cope with
financial volatility, reducing the economic disruption from sudden
swings in capital flows and the perceived need for excessive reserve
accumulation. As recovery takes hold, we will work together to
strengthen the Fund’s ability to provide even-handed, candid and
independent surveillance of the risks facing the global economy and the
international financial system. We ask the IMF to support our effort
under the Framework for Strong, Sustainable and Balanced Growth through
its surveillance of our countries’ policy frameworks and their
collective implications for financial stability and the level and
pattern of global growth.

21. Modernizing the IMF’s governance
is a core element of our effort to improve the IMF’s credibility,
legitimacy, and effectiveness. We recognize that the IMF should remain
a quota-based organization and that the distribution of quotas should
reflect the relative weights of its members in the world economy, which
have changed substantially in view of the strong growth in dynamic
emerging market and developing countries. To this end, we are committed
to a shift in quota share to dynamic emerging market and developing
countries of at least five percent from over-represented to
under-represented countries using the current IMF quota formula as the
basis to work from. We are also committed to protecting the voting
share of the poorest in the IMF. On this basis and as part of the IMF’s
quota review, to be completed by January 2011, we urge an acceleration
of work toward bringing the review to a successful conclusion. As part
of that review, we agree that a number of other critical issues will
need to be addressed, including: the size of any increase in IMF
quotas, which will have a bearing on the ability to facilitate change
in quota shares; the size and composition of the Executive Board; ways
of enhancing the Board’s effectiveness; and the Fund Governors’
involvement in the strategic oversight of the IMF. Staff diversity
should be enhanced. As part of a comprehensive reform package, we agree
that the heads and senior leadership of all international institutions
should be appointed through an open, transparent and merit-based
process. We must urgently implement the package of IMF quota and voice
reforms agreed in April 2008.

Reforming the Mission, Mandate and Governance of Our Development banks

22. The Multilateral Development Banks (MDBs) responded to our April call
to accelerate and expand lending to mitigate the impact of the crisis
on the world’s poorest with streamlined facilities, new tools and
facilities, and a rapid increase in their lending. They are on track to
deliver the promised $100 billion in additional lending. We welcome and
encourage the MDBs to continue making full use of their balance sheets.
We also welcome additional measures such as the temporary use of
callable capital contributions from a select group of donors as was
done at the InterAmerican Development Bank (IaDB). Our Finance
Ministers should consider how mechanisms such as temporary callable and
contingent capital could be used in the future to increase MDB lending
at times of crisis. We reaffirm our commitment to ensure that the
Multilateral Development Banks and their concessional lending
facilities, especially the International Development Agency (IDA) and
the African Development Fund, are appropriately funded.

23. Even as we work to mitigate the impact of the crisis, we must
strengthen and reform the global development architecture for
responding to the world’s long-term challenges.

24. We agree
that development and reducing global poverty are central to the
development banks’ core mission. The World Bank and other multilateral
development banks are also critical to our ability to act together to
address challenges, such as climate change and food security, which are
global in nature and require globally coordinated action. The World
Bank, working with the regional development banks and other
international organizations, should strengthen:

  • its focus on
    food security through enhancements in agricultural productivity and
    access to technology, and improving access to food, in close
    cooperation with relevant specialized agencies;
  • its focus on human development and security in the poorest and most challenging environments;
  • support for private-sector led growth and infrastructure to enhance
    opportunities for the poorest, social and economic inclusion, and
    economic growth; and
  • contributions to financing the transition
    to a green economy through investment in sustainable clean energy
    generation and use, energy efficiency and climate resilience; this
    includes responding to countries needs to integrate climate change
    concerns into their core development strategies, improved domestic
    policies, and to access new sources of climate finance.

25. To enhance their effectiveness, the World Bank and the regional
development banks should strengthen their coordination, when
appropriate, with other bilateral and multilateral institutions. They
should also strengthen recipient country ownership of strategies and
programs and allow adequate policy space.

26. We will help ensure the World Bank and the regional development banks have
sufficient resources to fulfill these four challenges and their
development mandate, including through a review of their general
capital increase needs to be completed by the first half of 2010.
Additional resources must be joined to key institutional reforms to
ensure effectiveness: greater coordination and a clearer division of
labor; an increased commitment to transparency, accountability, and
good corporate governance; an increased capacity to innovate and
achieve demonstrable results; and greater attention to the needs of the
poorest populations.

27. We commit to pursue governance and
operational effectiveness reform in conjunction with voting reform to
ensure that the World Bank is relevant, effective, and legitimate. We
stress the importance of moving towards equitable voting power in the
World Bank over time through the adoption of a dynamic formula which
primarily reflects countries’ evolving economic weight and the World
Bank’s development mission, and that generates in the next shareholding
review a significant increase of at least 3% of voting power for
developing and transition countries, in addition to the 1.46% increase
under the first phase of this important adjustment, to the benefit of
under-represented countries. While recognizing that over-represented
countries will make a contribution, it will be important to protect the
voting power of the smallest poor countries. We recommit to reaching
agreement by the 2010 Spring Meetings.

Energy Security and Climate Change

28. Access to diverse, reliable, affordable and clean energy is critical
for sustainable growth. Inefficient markets and excessive volatility
negatively affect both producers and consumers. Noting the St.
Petersburg Principles on Global Energy Security, which recognize the
shared interest of energy producing, consuming and transiting countries
in promoting global energy security, we individually and collectively
commit to:

  • Increase energy market transparency and market
    stability by publishing complete, accurate, and timely data on oil
    production, consumption, refining and stock levels, as appropriate, on
    a regular basis, ideally monthly, beginning by January 2010. We note
    the Joint Oil Data Initiative as managed by the International Energy
    Forum (IEF) and welcome their efforts to examine the expansion of their
    data collection to natural gas. We will improve our domestic
    capabilities to collect energy data and improve energy demand and
    supply forecasting and ask the International Energy Agency (IEA) and
    the Organization of Petroleum Exporting Countries (OPEC) to ramp up
    their efforts to assist interested countries in developing those
    capabilities. We will strengthen the producer-consumer dialogue to
    improve our understanding of market fundamentals, including supply and
    demand trends, and price volatility, and note the work of the IEF
    experts group.
  • Improve regulatory oversight of energy markets
    by implementing the International Organization of Securities
    Commissions (IOSCO) recommendations on commodity futures markets and
    calling on relevant regulators to collect data on large concentrations
    of trader positions on oil in our national commodities futures markets.
    We ask our relevant regulators to report back at our next meeting on
    progress towards implementation. We will direct relevant regulators to
    also collect related data on over-the-counter oil markets and to take
    steps to combat market manipulation leading to excessive price
    volatility. We call for further refinement and improvement of commodity
    market information, including through the publication of more detailed
    and disaggregated data, coordinated as far as possible internationally.
    We ask IOSCO to help national governments design and implement these
    policies, conduct further analysis including with regard with to
    excessive volatility, make specific recommendations, and to report
    regularly on our progress.

29. Enhancing our energy efficiency
can play an important, positive role in promoting energy security and
fighting climate change. Inefficient fossil fuel subsidies encourage
wasteful consumption, distort markets, impede investment in clean
energy sources and undermine efforts to deal with climate change. The
Organization for Economic Cooperation and Development (OECD) and the
IEA have found that eliminating fossil fuel subsidies by 2020 would
reduce global greenhouse gas emissions in 2050 by ten percent. Many
countries are reducing fossil fuel subsidies while preventing adverse
impact on the poorest. Building on these efforts and recognizing the
challenges of populations suffering from energy poverty, we commit to:

  • Rationalize
    and phase out over the medium term inefficient fossil fuel subsidies
    that encourage wasteful consumption. As we do that, we recognize the
    importance of providing those in need with essential energy services,
    including through the use of targeted cash transfers and other
    appropriate mechanisms. This reform will not apply to our support for
    clean energy, renewables, and technologies that dramatically reduce
    greenhouse gas emissions. We will have our Energy and Finance
    Ministers, based on their national circumstances, develop
    implementation strategies and timeframes, and report back to Leaders at
    the next Summit. We ask the international financial institutions to
    offer support to countries in this process. We call on all nations to
    adopt policies that will phase out such subsidies worldwide.

30. We request relevant institutions, such as the IEA, OPEC, OECD, and
World Bank, provide an analysis of the scope of energy subsidies and
suggestions for the implementation of this initiative and report back
at the next summit.

31. Increasing clean and renewable energy
supplies, improving energy efficiency, and promoting conservation are
critical steps to protect our environment, promote sustainable growth
and address the threat of climate change. Accelerated adoption of
economically sound clean and renewable energy technology and energy
efficiency measures diversifies our energy supplies and strengthens our
energy security. We commit to:

  • Stimulate investment in clean energy, renewables, and energy efficiency and
    provide financial and technical support for such projects in developing
  • Take steps to facilitate the diffusion or transfer
    of clean energy technology including by conducting joint research and
    building capacity. The reduction or elimination of barriers to trade
    and investment in this area are being discussed and should be pursued
    on a voluntary basis and in appropriate fora.

32. As leaders
of the world’s major economies, we are working for a resilient,
sustainable, and green recovery. We underscore anew our resolve to take
strong action to address the threat of dangerous climate change. We
reaffirm the objective, provisions, and principles of the United
Nations Framework Convention on Climate Change (UNFCCC), including
common but differentiated responsibilities. We note the principles
endorsed by Leaders at the Major Economies Forum in L’Aquila, Italy. We
will intensify our efforts, in cooperation with other parties, to reach
agreement in Copenhagen through the UNFCCC negotiation. An agreement
must include mitigation, adaptation, technology, and financing.

33. We welcome the work of the Finance Ministers and direct them to report
back at their next meeting with a range of possible options for climate
change financing to be provided as a resource to be considered in the
UNFCCC negotiations at Copenhagen.

Strengthening Support for the Most Vulnerable

34. Many emerging and developing economies have made great strides in
raising living standards as their economies converge toward the
productivity levels and living standards of advanced economies. This
process was interrupted by the crisis and is still far from complete.
The poorest countries have little economic cushion to protect
vulnerable populations from calamity, particularly as the financial
crisis followed close on the heels of a global spike in food prices. We
note with concern the adverse impact of the global crisis on low income
countries’ (LICs) capacity to protect critical core spending in areas
such as health, education, safety nets, and infrastructure. The UN’s
new Global Impact Vulnerability Alert System will help our efforts to
monitor the impact of the crisis on the most vulnerable. We share a
collective responsibility to mitigate the social impact of the crisis
and to assure that all parts of the globe participate in the recovery.

35. The MDBs play a key role in the fight against poverty. We recognize the
need for accelerated and additional concessional financial support to
LICs to cushion the impact of the crisis on the poorest, welcome the
increase in MDB lending during the crisis and support the MDBs having
the resources needed to avoid a disruption of concessional financing to
the most vulnerable countries. The IMF also has increased its
concessional lending to LICs during the crisis. Resources from the sale
of IMF gold, consistent with the new income model, and funds from
internal and other sources will double the Fund’s mediumterm concessional lending capacity.

36. Several countries are considering creating, on a voluntary basis,
mechanisms that could allow, consistent with their national
circumstances, the mobilization of existing SDR resources to support
the IMF’s lending to the poorest countries. Even as we work to mitigate
the impact of the crisis, we must strengthen and reform the global
development architecture for responding to the world’s long-term
challenges. We ask our relevant ministers to explore the benefits of a
new crisis support facility in IDA to protect LICs from future crises
and the enhanced use of financial instruments in protecting the
investment plans of middle income countries from interruption in times
of crisis, including greater use of guarantees.

37. We reaffirm our historic commitment to meet the Millennium Development
Goals and our respective Official Development Assistance (ODA) pledges,
including commitments on Aid for Trade, debt relief, and those made at
Gleneagles, especially to sub-Saharan Africa, to 2010 and beyond.

38. Even before the crisis, too many still suffered from hunger and poverty
and even more people lack access to energy and finance. Recognizing
that the crisis has exacerbated this situation, we pledge cooperation
to improve access to food, fuel, and finance for the poor.

39. Sustained funding and targeted investments are urgently needed to
improve long-term food security. We welcome and support the food
security initiative announced in L’Aquila and efforts to further
implement the Global Partnership for Agriculture and Food Security and
to address excessive price volatility. We call on the World Bank to
work with interested donors and organizations to develop a multilateral
trust fund to scale-up agricultural assistance to low-income countries.
This will help support innovative bilateral and multilateral efforts to
improve global nutrition and build sustainable agricultural systems,
including programs like those developed through the Comprehensive
African Agricultural Development Program (CAADP). It should be designed
to ensure country ownership and rapid disbursement of funds, fully
respecting the aid effectiveness principles agreed in Accra, and
facilitate the participation of private foundations, businesses, and
non-governmental organizations (NGOs) in this historic effort. These
efforts should complement the UN Comprehensive Framework for
Agriculture. We ask the World Bank, the African Development Bank, UN,
Food and Agriculture Organization (FAO), International Fund for
Agricultural Development (IFAD), World Food Programme (WFP) and other
stakeholders to coordinate their efforts, including through country-led
mechanisms, in order to complement and reinforce other existing
multilateral and bilateral efforts to tackle food insecurity.

To increase access to energy, we will promote the deployment of clean,
affordable energy resources to the developing world. We commit, on a
voluntary basis, to funding programs that achieve this objective, such
as the Scaling Up Renewable Energy Program and the Energy for the Poor
Initiative, and to increasing and more closely harmonizing our
bilateral efforts.

41. We commit to improving access to
financial services for the poor. We have agreed to support the safe and
sound spread of new modes of financial service delivery capable of
reaching the poor and, building on the example of micro finance, will
scale up the successful models of small and medium-sized enterprise
(SME) financing. Working with the Consultative Group to Assist the Poor
(CGAP), the International Finance Corporation (IFC) and other
international organizations, we will launch a G-20 Financial Inclusion
Experts Group. This group will identify lessons learned on innovative
approaches to providing financial services to these groups, promote
successful regulatory and policy approaches and elaborate standards on
financial access, financial literacy, and consumer protection. We
commit to launch a G-20 SME Finance Challenge, a call to the
private sector to put forward its best proposals for how public finance
can maximize the deployment of private finance on a sustainable and
scalable basis.

42. As we increase the flow of capital to
developing countries, we also need to prevent its illicit outflow. We
will work with the World Bank’s Stolen Assets Recovery (StAR) program
to secure the return of stolen assets to developing countries, and
support other efforts to stem illicit outflows. We ask the FATF to help
detect and deter the proceeds of corruption by prioritizing work to
strengthen standards on customer due diligence, beneficial ownership
and transparency. We note the principles of the Paris Declaration on
Aid Effectiveness and the Accra Agenda for Action and will work to
increase the transparency of international aid flows by 2010. We call
for the adoption and enforcement of laws against transnational bribery,
such as the OECD Anti-Bribery Convention, and the ratification by the
G-20 of the UN Convention against Corruption (UNCAC) and the adoption
during the third Conference of the Parties in Doha of an effective,
transparent, and inclusive mechanism for the review of its
implementation. We support voluntary participation in the Extractive
Industries Transparency Initiative, which calls for regular public
disclosure of payments by extractive industries to governments and
reconciliation against recorded receipt of those funds by governments.

Putting Quality Jobs at the Heart of the Recovery

43. The prompt, vigorous and sustained response of our countries has saved
or created millions of jobs. Based on International Labour Organization
(ILO) estimates, our efforts will have created or saved at least 7 – 11
million jobs by the end of this year. Without sustained action,
unemployment is likely to continue rising in many of our countries even
after economies stabilize, with a disproportionate impact on the most
vulnerable segments of our population. As growth returns, every country
must act to ensure that employment recovers quickly. We commit to
implementing recovery plans that support decent work, help preserve
employment, and prioritize job growth. In addition, we will continue to
provide income, social protection, and training support for the
unemployed and those most at risk of unemployment. We agree that the
current challenges do not provide an excuse to disregard or weaken
internationally recognized labor standards. To assure that global
growth is broadly beneficial, we should implement policies consistent
with ILO fundamental principles and rights at work.

44. Our new Framework for Strong, Sustainable, and Balanced Growth requires
structural reforms to create more inclusive labor markets, active labor
market policies, and quality education and training programs. Each of
our countries will need, through its own national policies, to
strengthen the ability of our workers to adapt to changing market
demands and to benefit from innovation and investments in new
technologies, clean energy, environment, health, and infrastructure. It
is no longer sufficient to train workers to meet their specific current
needs; we should ensure access to training programs that support
lifelong skills development and focus on future market needs. Developed
countries should support developing countries to build and strengthen
their capacities in this area. These steps will help to assure that the
gains from new inventions and lifting existing impediments to growth
are broadly shared.

45. We pledge to support robust training
efforts in our growth strategies and investments. We recognize
successful employment and training programs are often designed together
with employers and workers, and we call on the ILO, in partnership with
other organizations, to convene its constituents and NGOs to develop a
training strategy for our consideration.

46. We agree on the
importance of building an employment-oriented framework for future
economic growth. In this context, we reaffirm the importance of the
London Jobs Conference and Rome Social Summit. We also welcome the
recently-adopted ILO Resolution on Recovering from the Crisis: A Global
Jobs Pact, and we commit our nations to adopt key elements of its
general framework to advance the social dimension of globalization. The
international institutions should consider ILO standards and the goals
of the Jobs Pact in their crisis and post-crisis analysis and
policy-making activities.

47. To ensure our continued focus on
employment policies, the Chair of the Pittsburgh Summit has asked his
Secretary of Labor to invite our Employment and Labor Ministers to meet
as a group in early 2010 consulting with labor and business and
building on the upcoming OECD Labour and Employment Ministerial meeting
on the jobs crisis. We direct our Ministers to assess the evolving
employment situation, review reports from the ILO and other
organizations on the impact of policies we have adopted, report on
whether further measures are desirable, and consider medium-term
employment and skills development policies, social protection programs,
and best practices to ensure workers are prepared to take advantage of
advances in science and technology.

An Open Global Economy

48. Continuing the revival in world trade and investment is essential to
restoring global growth. It is imperative we stand together to fight
against protectionism. We welcome the swift implementation of the $250
billion trade finance initiative. We will keep markets open and free
and reaffirm the commitments made in Washington and London: to refrain
from raising barriers or imposing new barriers to investment or to
trade in goods and services, imposing new export restrictions or
implementing World Trade Organization (WTO) inconsistent measures to
stimulate exports and commit to rectify such measures as they arise. We
will minimize any negative impact on trade and investment of our
domestic policy actions, including fiscal policy and action to support
the financial sector. We will not retreat into financial protectionism,
particularly measures that constrain worldwide capital flows,
especially to developing countries. We will notify promptly the WTO of
any relevant trade measures. We welcome the latest joint report from
the WTO, OECD, IMF, and United Nations Conference on Trade and
Development (UNCTAD) and ask them to continue to monitor the situation
within their respective mandates, reporting publicly on these
commitments on a quarterly basis.

49. We remain committed to
further trade liberalization. We are determined to seek an ambitious
and balanced conclusion to the Doha Development Round in 2010,
consistent with its mandate, based on the progress already made,
including with regard to modalities. We understand the need for
countries to directly engage with each other, within the WTO bearing in
mind the centrality of the multilateral process, in order to evaluate
and close the remaining gaps. We note that in order to conclude the
negotiations in 2010, closing those gaps should proceed as quickly as
possible. We ask our ministers to take stock of the situation no later
than early 2010, taking into account the results of the work program
agreed to in Geneva following the Delhi Ministerial, and seek progress
on Agriculture, Non-Agricultural Market Access, as well as Services,
Rules, Trade Facilitation and all other remaining issues. We will
remain engaged and review the progress of the negotiations at our next

The Path from Pittsburgh

50. Today, we designated the G-20 as the premier forum for our international economic
cooperation. We have asked our representatives to report back at the
next meeting with recommendations on how to maximize the effectiveness
of our cooperation. We agreed to have a G-20 Summit in Canada in June
2010, and in Korea in November 2010. We expect to meet annually
thereafter, and will meet in France in 2011.

ANNEX: Core Values for Sustainable Economic Activity

1. The economic crisis demonstrates the importance of ushering in a new
era of sustainable global economic activity grounded in responsibility.
The current crisis has once again confirmed the fundamental recognition
that our growth and prosperity are interconnected, and that no region
of the globe can wall itself off in a globalized world economy.

2. We, the Leaders of the countries gathered for the Pittsburgh Summit,
recognize that concerted action is needed to help our economies get
back to stable ground and prosper tomorrow. We commit to taking
responsible actions to ensure that every stakeholder – consumers,
workers, investors, entrepreneurs – can participate in a balanced,
equitable, and inclusive global economy.

3. We share the
overarching goal to promote a broader prosperity for our people through
balanced growth within and across nations; through coherent economic,
social, and environmental strategies; and through robust financial
systems and effective international collaboration.

4. We recognize that there are different approaches to economic development
and prosperity, and that strategies to achieve these goals may vary
according to countries’ circumstances.

5. We also agree that certain key principles are fundamental, and in this spirit we commit to respect the following core values:

  • We have a responsibility to ensure sound macroeconomic policies that serve
    long-term economic objectives and help avoid unsustainable global
  • We have a responsibility to reject protectionism in
    all its forms, support open markets, foster fair and transparent
    competition, and promote entrepreneurship and innovation across
  • We have a responsibility to ensure, through
    appropriate rules and incentives, that financial and other markets
    function based on propriety, integrity and transparency and to
    encourage businesses to support the efficient allocation of resources
    for sustainable economic performance.
  • We have a responsibility
    to provide for financial markets that serve the needs of households,
    businesses and productive investment by strengthening oversight,
    transparency, and accountability.
  • We have a responsibility to
    secure our future through sustainable consumption, production and use
    of resources that conserve our environment and address the challenge of
    climate change.
  • We have a responsibility to invest in people by
    providing education, job training, decent work conditions, health care
    and social safety net support, and to fight poverty, discrimination,
    and all forms of social exclusion.
  • We have a responsibility to
    recognize that all economies, rich and poor, are partners in building a
    sustainable and balanced global economy in which the benefits of
    economic growth are broadly and equitably shared. We also have a
    responsibility to achieve the internationally agreed development goals.
  • We have a responsibility to ensure an international economic and financial
    architecture that reflects changes in the world economy and the new
    challenges of globalization.

G-20 Framework for Strong, Sustainable, and Balanced Growth

1. Our countries have a shared responsibility to adopt policies to achieve
strong, sustainable and balanced growth, to promote a resilient
international financial system, and to reap the benefits of an open
global economy. To this end, we recognize that our strategies will vary
across countries. In our Framework for Strong, Sustainable and Balanced
Growth, we will:

  • implement responsible
    fiscal policies, attentive to short-term flexibility considerations and
    longer-run sustainability requirements.
  • strengthen financial
    supervision to prevent the re-emergence in the financial system of
    excess credit growth and excess leverage and undertake macro prudential
    and regulatory policies to help prevent credit and asset price cycles
    from becoming forces of destabilization.
  • promote more balanced
    current accounts and support open trade and investment to advance
    global prosperity and growth sustainability, while actively rejecting
    protectionist measures.
  • undertake monetary policies consistent
    with price stability in the context of market oriented exchange rates
    that reflect underlying economic fundamentals.
  • undertake structural reforms to increase our potential growth rates and, where needed, improve social safety nets.
  • promote balanced and sustainable economic development in order to narrow development imbalances and reduce poverty.

2. We recognize that the process to ensure more balanced global growth
must be undertaken in an orderly manner. All G-20 members agree to
address the respective weaknesses of their economies.

  • G-20 members with sustained, significant external deficits pledge to
    undertake policies to support private savings and undertake fiscal
    consolidation while maintaining open markets and strengthening export
  • G-20 members with sustained, significant external
    surpluses pledge to strengthen domestic sources of growth. According to
    national circumstances this could include increasing investment,
    reducing financial markets distortions, boosting productivity in
    service sectors, improving social safety nets, and lifting constraints
    on demand growth.

3. Each G-20 member bears primary
responsibility for the sound management of its economy. The G-20
members also have a responsibility to the community of nations to
assure the overall health of the global economy. Regular consultations,
strengthened cooperation on macroeconomic policies, the exchange of
experiences on structural policies, and ongoing assessment can
strengthen our cooperation and promote the adoption of sound policies.
As part of our process of mutual assessment:

  • G-20 members will agree on shared policy objectives. These objectives should be updated as conditions evolve.
  • G-20 members will set out their medium-term policy frameworks and will work
    together to assess the collective implications of our national policy
    frameworks for the level and pattern of global growth, and to identify
    potential risks to financial stability.
  • G-20 leaders will consider, based on the results of the mutual assessment, and agree any actions to meet our common objectives.

4. We call on our Finance Ministers to develop our process of mutual
assessment to evaluate the collective implications of national policies
for the world economy. To accomplish this, our Finance Ministers
should, with the assistance of the IMF:

  • Develop
    a forward looking assessment of G-20 economic developments to help
    analyze whether patterns of demand and supply, credit, debt and
    reserves growth are supportive of strong, sustainable and balanced
  • Assess the implications and consistency of fiscal and
    monetary policies, credit growth and asset markets, foreign exchange
    developments, commodity and energy prices, and current account
  • Report regularly to both the G-20 and the IMFC on
    global economic developments, key risks, and concerns with respect to
    patterns of growth and suggested G-20 policy adjustments, individually
    and collectively.

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