EU Heads agreed that, in order to develop a basis for sustainable growth, and taking into account the specific situation of individual countries, exit strategies need to be designed and implemented in a co-ordinated manner as soon as recovery takes hold.
The G-20 should reaffirm its determination to continue implementing co-ordinated policy measures in order to develop the basis for sustainable growth and to avoid a repetition of the recent financial crisis. Efforts must be maintained until recovery is secured. Overall support to the EU economy in 2009 and 2010 is projected to amount to around 5 per cent of GDP. Taking into account the specific situations of individual countries, exit strategies need to be designed and implemented in a coordinated manner as soon as recovery takes hold.
EU government and state heads heard details of the report on the future of international economic co-operation and co-ordination to be submitted by the G-20 President to the Pittsburgh meeting. With regard to the current financial markets situation, they highlighted the following issues:
· Improving the functioning of financial markets is essential in order to avoid a repetition of the crisis. The commitments agreed at the London summit must be implemented. The G-20 should commit to a globally coordinated system of macro-prudential supervision, based on close co-operation of the IMF, the FSB and the supervisory authorities, with effective exchange of information.
· The functioning of the banking system remains critical to restoring growth and re-establishing credit flows. In order to safeguard the long-term viability of banks, a restructuring of the banking sector must take place, in parallel with actions to improve the quality of bank balance sheets.
· All G-20 countries must adopt the Basel II capital framework in a consistent and co-ordinated way. Existing loopholes in the Basel framework must be closed.
· Accounting standards-setting bodies need to accelerate their joint work on a single set of high-quality global accounting standards, with all G-20 countries committing to implement these new standards as soon as possible.
· The G-20 must strengthen oversight of systemically important financial institutions by enhancing their supervisory and regulatory requirements (i.e. through tailor-made stress tests, contingency plans and capital buffers). The quality of cross-border supervision needs to be improved and the G-20 should commit to work in a co-ordinated manner on this issue.
· In particular, the G-20 should commit to agreeing to binding rules for financial institutions on variable remunerations backed up by the threat of sanctions at national level.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article