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Finance Chiefs Discuss New Rules For Post-Crisis World Economy

  • Kurt Achin

Top financial officials from the world's leading economies are gathering in South Korea to discuss ways of managing a global recovery. They hope to prevent a repeat of the financial crisis that started with the crippling of major U.S. investment banks. They also want to level the playing field for less developed economies.

South Korean Finance Minister Yoon Jeung-hyun said Friday he is hosting the global finance ministers and central bank chiefs at just the right moment.

"Today we are meeting at a critical time when our cooperation is more important than ever to address significant economic risks and firmly secure the global recovery,"said Yoon Jeung-hyun.

The economic leaders gathered here in the South Korean port city of Busan belong to the so-called G-20 group of leading economies. The economic agenda they hope to set will be put before heads of state scheduled to meet later this year.

The United States and other advanced economies have spent billions on economic stimulus to counter a recession sparked by the collapse of U.S. investment bank Lehman Brothers in 2008. With a broad consensus that a global economic recovery has begun, policymakers are debating how quickly to turn off stimulus spending and tighten their belts in order to control ballooning debt.

Minister Yoon indicated recent financial problems in Europe tied to a debt crisis in Greece are on everyone's mind.

"The recent event in europe and volatility in the financial market have clearly shown us the global recovery is still
fragile," he said. "We can't afford to be complacent. Without further and ongoing action from us the recovery may not remain on track and we may not be able to achieve strong, sustainable and balanced growth."

G-20 leaders are looking at a menu of policy proposals put forward by the European Union, the European Central Bank, and the International Monetary Fund.

One item getting a lot of attention is a proposed tax on certain banking transactions to create a safety fund for future emergencies. The United States and several European partners support the idea. Canada and Australia are leading opposition to it. They say unlike the United States, they did not fund huge bank bailouts and should not be penalized.

Leaders are expected to put out a communique of recommendations Saturday.

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