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G20 pledge further action on financial crisis
(Agencies)
Updated: 2009-03-15 08:59 Officials instead put the focus on restoring frozen bank lending through cash infusions and dealing with the shaky assets souring bank's balance sheets. The US is working on a plan to do that with public and private money, but details have not yet been announced. The G-20 statement also agreed to some oversight on hedge funds, largely unregulated investment funds whose financial clout has grown enormously over the past decade. "We agreed that stronger regulation ... was necessary to prevent the build-up of systemic risk," he said.
They also agreed to oversight and registration of credit rating agencies, clearer accounting rules for problem assets, and more standards for credit derivatives, another lightly regulated area that has raised fears of large losses. Steinbrueck said it was now crucial to turn these promises into concrete action so that "every financial market ... should be supervised, regulated or overseen and that includes pools of capital like hedge funds or private equity funds." The group also committed to fighting protectionism and pledged to help emerging and developing economies to cope with the loss of international capital flows, an issue that they have raised repeatedly. The four major emerging economies at the meeting — Brazil, Russia, India and China — had earlier released their own joint communique, calling for a bigger role in the International Monetary Fund. The final summit statement agreed that IMF governance needs to reflect the changed global economy and the growing role of developing countries.
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