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The agendas for growth, financial regulation and financial architecture – have been occupying us ever since the global crisis emerged and G20 Leaders met in November 2008. The Russian Presidency has given special attention to the fourth issue, long-term investment financing for growth and development. And rightly so in my view, considering the key role played by investment not only in increasing output in the short term, but also boosting potential output over the medium term.
Policy actions, notably by G20 members, have been able to bolster confidence and improve financial market sentiment.
Conditions in the banking sector, and in financial markets more generally, have significantly improved since the summer of last year. This is manifested by rising global equity prices and a decline in financial market volatility and global risk aversion. Global capital flows have picked up again. Spreads on sovereign and corporate bonds are narrowing.
But we have to remain prudent. We should continue to press ahead with reforms to avoid abrupt changes in financial market sentiment. And we can only acknowledge that for some of the G20 members this improvement in financial markets has not yet found its way through to the real economy. The key responsibility for us, economic policy makers in the G20, is therefore to continue our action based on the three pillars: