Obama Calls G-20 Summit a Turning Point

More money for IMF and greater regulation among high points of communiqu?

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The leaders of the 20 nations making up the G-20 summit issued a joint communiqu? April 2 pledging some $1.1 trillion in loans and guarantees to the world's poorest countries as well as agreeing to further regulation of hedge funds and to "take action against non-cooperative jurisdictions, including tax havens."

The document's centerpiece is a six-point pledge by the leaders to:

  • l restore confidence, growth, and jobs
  • l repair the financial system to restore lending
  • l strengthen financial regulation to rebuild trust
  • l fund and reform international financial institutions to overcome this crisis and prevent future ones
  • l promote global trade and investment and reject protectionism, to underpin prosperity
  • l build an inclusive, green, and sustainable recovery.

To help realize the goals of that pledge, the leaders pledged to increase the resources of the International Monetary Fund threefold to $750 billion, as well as to support a new Special Drawing Rights allocation of $250 billion and at least $100 billion in additional lending.

The communiqu? also announced the formation of a new Financial Stability Board to "collaborate with the IMF to provide early warning of macroeconomic and financial risks and the actions needed to address them" and "to reshape our regulatory systems so that authorities are able to identify and take account of macro-prudential risks."

At the end of his first international summit, President Barack Obama hailed the group's agreements as a "turning point in our pursuit of global economic recovery," but also warned that "there are no guarantees."

The U.S. and Britain appear to have been unsuccessful in their efforts to persuade other nations, particularly France and Germany, that more government stimulus is called for.

The G-20 group plans to meet again later this year to review the success of its plans.

Download a pdf of the entire communique here.

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