The Group of 20 nations agreed on Friday on a way to measure the potential risks to the global economy posed by national economic policies as part of a plan to avoid a repeat of the 2007-2009 financial crisis.
Following are highlights of comments by G20 financial leaders after the meeting, which was held on the sidelines of the International Monetary Fund and World Bank spring meetings.
G20 SHORT-TERM MOVES IN COMMUNIQUE
To strengthen the international monetary system, we agreed to focus our work, in the short term, on assessing developments in global liquidity, a country-specific analysis regarding drivers of reserve accumulation, a strengthened coordination to avoid disorderly movements and persistent exchange rates misalignments, a criteria-based path to broaden the composition of the SDR, an improved toolkit to strengthen the global financial safety nets, enhanced cooperation between the IMF and regional financial arrangements, the development of local capital markets and domestic currency borrowing, coherent conclusions for the management of capital flows drawing on country experiences.
CANADIAN FINANCE MINISTER JIM FLAHERTY ON G20 COMMUNIQUE
All the systemically large economies will be subject to the assessment and we will get the first reports back in October.
We will look and see how they are performing and we will look at issues like exchange rate flexibility or inflexibility. We will look at deficits and debt as well, and the recommendations will come back to the G20 about steps that need to be taken by some countries, if any along the lines of the assessment.
FLAHERTY ON G20 MONITORING
The facts will be known. That makes all the difference in the world that the IMF will be able to go in and look at information in various countries and disclose it to the G20. That is a very important step rather than try to guess what's going on in systemically important countries in the world and in their financial institutions and in their financial system.
FRENCH FINANCE MINISTER CHRISTINE LAGARDE ON GUIDELINES
The guidelines operate a little bit like a net which actually holds those of the countries that violate or do not respect the guidelines. And the net is a little bit tighter for those countries that are considered of systemic importance because they represent more than 5 percent of the GDP of the G20.
As a result of that, seven countries, clearly the most systemic ones, the ones that actually represent over 5 percent of GDP -- and I will just (leave)it to you to define and decide which seven those are -- are included in this exercise. But ultimately all 20 members of the G20 have occasion to be actually evaluated on the basis of those guidelines. And I'll be very happy to report that France being one of the systemic countries, is part of the group of seven.
ECB GOVERNING COUNCIL MEMBER CHRISTIAN NOYER ON G20 EFFORTS ON CAPITAL CONTROLS
We have made enormous progress. ... We do not any more have two fronts, one saying there should be total freedom and never any measure taken, and the other one saying each country should have the total (ability) to do whatever if feels necessary.
ECB PRESIDENT JEAN-CLAUDE TRICHET ON GREEK DEBT RESTRUCTURING
We did not discuss at all this issue in the G20.
In our own perspective there is a (austerity) plan. It is a plan which has been approved by the international community ... and we apply the plan.