Finance ministers and central bankers from the G-20 group of industrialized and emerging economies agreed to "do whatever is necessary" to boost the world economy amid a growing global recession. The promise comes ahead of a G-20 summit, scheduled for April 2 in London.
Britain's Treasury chief, Alistair Darling said the day and a half of talks in the southern English countryside near London, resulted in broad overall agreement on the need for a sustained effort to restore global growth. "And importantly, we stated that we're prepared to take whatever action is necessary to ensure that growth is restored and we are committed to do that for however long it takes to do that," he said.
Darling said priorities include: restoring lending by banks through cash infusions; creating stronger financial regulations, particularly for hedge funds; and fighting protectionism by opening trade and investment opportunities.
The G-20 economic leaders also promised increased funding for the International Monetary Fund to help those countries hit hardest by the recession. "We remain committed to helping emerging and developing economies to cope with the reversal of international capital flows causing a great deal of concern not just to them but to ourselves as well," he said.
The IMF has already extended billions of dollars in loans to struggling economies. The ministers also called for increased support for the Asian Development Bank.
US Treasury Secretary Timothy Geithner said the commitment shown by G-20 members will help ensure economic recovery comes more quickly. "We have a very broad base of consensus globally now on the need to act aggressively to restore growth and a commitment to move together to address this evolving crisis," he said.
Geithner also said agreement was reached on a framework of reforms for the international financial system. "Risk does not respect national borders. We must establish a much stronger form of oversight and clear rules of the game more evenly enforced across the international financial system," he said.
Geithner said the United States would soon release details of regulatory reforms for its markets.
The focus of this G-20 finance meeting was clearly on consensus, with little mention of differences among some of its members.
The broad fault lines have generally been over whether to follow the U.S. lead and boost spending by injecting more government money into ailing economies or to focus on imposing more stringent regulations on banks and other financial institutions to prevent a similar economic meltdown in the future.
The United States, in particular, is pushing for coordinated stimulus efforts and tax cuts. Britain has also favored public spending, but also agrees with most European members, who lean towards a broader overhaul of the financial system with tighter regulations on banks, tax havens and hedge funds. Many emerging economies say if they are to contribute they want a greater say in major international financial institutions, such as the IMF.
This meeting is to pave the way for the next G-20 heads of state summit here in London on April 2.