Finance officials from the world's wealthiest nations pledged at a
meeting in London Saturday to maintain stimulus measures to boost the
global economy, warning that the fledgling recovery that provided the
backdrop to their meeting is by no means assured.
Even though there are some early signs that the
recession may be starting to fade in places like Germany, France and
Japan, the finance chiefs vowed to keep spending.
Secretary Timothy Geithner agreed. "We need to provide sustained
support for growth and financial repair until we have in place a strong
foundation for recovery," he said.
Economists point out that
withdrawing too early from the trillions of dollars worth of stimulus
packages that have been pumped into the world economy over the past few
month could result in a another downturn, creating a so-called
Geithner also warned that one of the
last factors to improve in any downturn is unemployment He said that
governments must continue to work on this area.
system is showing signs of repair, growth is now under way," said
Geithner. "However, we still face significant challenges ahead.
Unemployment is unacceptably high. Conditions for a sustained recovery,
led by private demand, are not yet established."
weekend meeting provided a forum to develop common ground before the
next G-20 summit in the U.S. city of Pittsburgh in three weeks.
Secretary Geithner said that while action by central banks and
governments has pulled the global economy back from the edge, it's
important that reform continues.
"As we look towards the summit
in Pittsburgh, we need to bring the sense the same sense of common
purpose and urgency that we demonstrated at the peak of the crisis to
the challenge of restoring growth and to reforming the financial
system," he said. "We made a lot of progress bet we have got a way to
go and we cannot let momentum for reform fade as the crisis recedes."
finance officials here also pledged in general terms to put
restrictions on excess bankers' bonuses. Many blame that bonus culture
for fueling the current crisis.
They also discussed a U.S.
proposal to require international banks to maintain deeper reserves so
they would be able to cover any potential loan losses that might arise
in the future.