Financial leaders pledge to cooperate in meeting policy challenges of twenty-first century

• Author: Meeting the challenge. -Financial crises.
• Pages: 353-357

Page 353

The Group of 20 finance ministers and central bank governors met in Montreal on October 24–25 to discuss the state of the world economy, associated policy challenges, and ways to address potential weaknesses in the international financial system. IMF Managing Director Horst Köhler participated in the meeting. In a statement released on October 25, ministers and governors welcomed “the continuing strengthening of global economic growth,” but said they remained “mindful of the importance of sound national and economic and financial policies in building an international financial system that is less prone to crisis.”

While reaffirming their belief in economic integration and the powerful benefits of globalization, including “an unparalleled opportunity to achieve sustained and broad-based improvements in living standards,” the financial leadersPage 357 agreed that globalization, like any economic transformation, “can also give rise to economic difficulties and social dislocations.” The ministers and governors therefore agreed “that putting in place the right frameworks and policies for promoting a globalization process that works well for all of its participants will be the key challenge for the international community in the twenty-first century.”

Meeting the challenge

Pledging to work together to promote policies to meet this challenge, the finance ministers and governors of the Group of 20 specifically agreed to

• commit themselves to further improve the effectiveness of international institutions, which are fundamental to a strong and stable global financial system;

• implement the emerging international consensus on policies to reduce countries’ vulnerability to financial crisis, including through appropriate exchange rate arrangements, prudent liability management, private sector involvement in crisis prevention and resolution, and the adoption of codes and standards in key areas;

• improve integration into the globalized financial world;

• create more favorable conditions for the integration of heavily indebted poor countries (HIPC) into the global economy by urging both bilateral and multilateral creditors to participate fully in the enhanced HIPC Initiative;

• strengthen efforts to combat financial abuse, including money laundering, tax evasion, and corruption, given its potential to undermine the credibility and integrity of the international financial system;

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