26 February 2012

G20 communiqué: Meeting of Finance Ministers and Central Bank Governors

Substantial policy actions have taken place since the last meeting, and recent economic developments point to the continuation of a modest global recovery and an easing in global financial market stress. G20 welcomes the important progress made by Europe in recent months to strengthen their fiscal positions, adopt measures to reduce financial stress, build stronger institutions, implement growth-enhancing structural reforms, and to put Greece on a sustainable path. G20 also welcomes the market improvement associated with the actions undertaken by the ECB. Nevertheless, growth expectations for 2012 are moderate and downside risks continue to be high. The international economic environment has continued to be characterised by an uneven performance, with weak growth in advanced economies and a stronger, albeit slowing, expansion in emerging markets. Structural problems, insufficient global rebalancing, a persistent development gap and high levels of public and private indebtedness and uncertainty continue weighing on medium-term global growth prospects. While volatility in international financial markets has declined, it generally remains high and G20 is committed to reducing downside risks further. G20  is alert to the risks of higher oil prices and welcomes the commitment by producing countries to continue to ensure adequate supply. With unemployment still too high in many countries, G20 is firmly committed to supporting growth and job creation.

The Cannes Action Plan for growth and jobs established significant commitments towards achieving the goal of strong, sustainable and balanced growth. G20 is making progress in implementing these commitments, which remain fully relevant. G20 agreed today to enhance monitoring and accountability to ensure that its commitments are achieved, including on fiscal, financial, structural, monetary and exchange rate, trade and development policies as mandated by G20 Leaders in Cannes. To update policy actions towards common goals, G20 further agreed to develop a Los Cabos Action Plan. Recognising that employment and social inclusion are at the heart of our actions, G20 looks forward to receiving the report by international organisations on how the G20 framework can contribute to job creation. G20 will review the progress when it meets in April.

G20 members have been actively engaged in taking the steps needed to safeguard the global financial system and to avoid adverse scenarios. At Cannes, the review of the adequacy of IMF resources was demanded. This review is particularly important against the backdrop of continued downside risks. Euro area countries will reassess the strength of their support facilities in March. This will provide an essential input in G20's ongoing consideration to mobilise resources to the IMF. G20 is reviewing options, as requested by Leaders, to ensure resources for the IMF could be mobilised in a timely manner. G20 reaffirmed its commitment that the IMF should remain a quota-based institution and agreed that a feasible way to increase IMF resources in the short-run is through bilateral borrowing and note purchase agreements with a broad range of IMF members.

In order to avoid new systemic risks, G20 reaffirms its commitment to common global standards by pursuing the financial regulatory reform agenda according to its agreed timetable in an internationally-consistent and non-discriminatory manner. G20 will monitor its full and timely implementation in all jurisdictions through the FSB Coordination Framework for Implementation Monitoring. This agenda includes Basel II, II.5 and III, the reforms on OTC derivatives markets, the policy measures to address systemically important financial institutions, including the Key Attributes for Effective Resolution Regimes, and the principles and standards for sound compensation practices. G20 encourages the work that is underway on systemic financial market infrastructures, including safeguards to promote central clearing, on strengthening the oversight and regulation of shadow banking activities and on the global governance framework for the legal entity identifier. G20 welcomes the FSB progress report on reducing reliance on external credit ratings and encourages further progress by national authorities and standard-setting bodies in this area. G20 also welcomes the establishment of the Working Group on FSB Capacity, Resources and Governance and looks forward to its recommendations for placing the FSB on an enduring organisational footing, with legal personality and greater financial autonomy, while maintaining strong links with the BIS. G20 has tasked the FSB to coordinate, with the IMF and World Bank, a study to identify the extent to which the agreed regulatory reforms may have unintended consequences for EMDEs.

As an important complement of the G20 financial regulation agenda, G20 agreed to follow through on the five recommendations of the 2011 Global Partnership for Financial Inclusion report, endorsed in Cannes, and take the financial inclusion agenda forward towards concrete results. G20 also agreed to work on three areas to foster financial inclusion. First, by sharing the experiences of G20 and non-G20 countries under the "G20 Financial Inclusion Peer Learning Programme", and developing an implementation framework for country commitments for financial inclusion. Second, by recogniz=sing the importance and relevance of the work that the OECD and the International Network on Financial Education (INFE), and the World Bank have been doing on financial education as well as the development of the High Level Principles on National Strategies of Financial Education by the Los Cabos Summit. Third, advancing the financial consumer protection agenda by developing effective approaches to support implementation of the High Level Principles endorsed in Cannes.

G20 looks forward to a report to our Leaders by the Global Forum on Transparency and Exchange of Information on progress made and on a new set of reviews. It calls upon all countries to join the Global Forum on transparency and to sign on the Multilateral Convention on Mutual Assistance. G20 calls for an interim report and update by the OECD on necessary steps to improve comprehensive information exchange, including automatic exchange of information and, together with the FATF, on steps taken to prevent the misuse of corporate vehicles and improve interagency cooperation in the fight against illicit activities. G20 welcomes the adoption of the revised FATF recommendations on combating money laundering and the financing of terrorism. G20 also welcomes the ongoing work by the FSB on adherence to supervisory and regulatory information exchange and cooperation standards.

Recognising the importance of "green growth" G20 asks the OECD, with the World Bank and the UN, to prepare a report that provides options for G20 countries on inserting green growth and sustainable development policies into structural reform agendas, tailored to specific country conditions and level of development. G20 will contribute to the preparation of the report by voluntarily informing on its actions to integrate green growth and sustainable development into structural reform agendas.

G20  recognises the value of Disaster Risk Management (DRM) tools and strategies, better to prevent disasters, protect populations and assets, and financially manage their economic impacts. G20 also acknowledges the need to expand its use. To that end, G20 has asked the World Bank to prepare a compilation of country experiences and the OECD to recommend a framework that countries may use for the implementation of DRM strategies.

Full communiqué

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