World Business

G20 joint communique calls for continued efforts for financial reform

(Xinhua)
Updated: 2010-06-05 16:12

BUSAN, South Korea - South Korean Financial Minister Yoon Jeung-hyun on Saturday announced a joint communique signed by financial leaders of the G20 countries as the conclusion of the Busan G20 financial meeting, calling for continued efforts for financial repair and reform.

The communique said, "... further progress on financial repair is critical to global economic recovery. This requires greater transparency and further strengthening of banks' balance sheets and better corporate governance of financial firms."

It said that agreement on stronger capital and liquidity standards is the core of the reform agenda.

The leaders agree on the need to reduce moral hazard, while pledging to accelerate regulation and supervision of hedge funds, credit rating agencies, compensation practices and OTC derivatives in an internationally consistent and non-discriminatory way.

The leaders, in the communique, also urge to discourage excessive leverage and risk taking by the November 2010 Seoul Summit.

The communique remarked on the World Bank's reform voice to increase the voting power of developing countries, while protecting the smallest poor nations, embracing the proposal.

Constructing global financial safety nets is also one of the major items on the communique, with the G20 countries acknowledging a need for national, regional and multilateral efforts to deal with capital volatility and prevent crisis contagion.

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However, bank levy, the core of the disputes, was not elaborated in detail in the communique, only endorsed as a need for a fair and substantial contribution towards paying for any burdens to repair the banking system or fund resolution.

South Korean Financial Minister Yoon Jeung-hyun announced the joint communique signed by the G20 financial leaders at the conclusion of a two-day meeting held in Busan, South Korea.

The joint communique was founded on the Framework for Strong, Sustainable, and Balanced Growth, which is a key mechanism to meet the immediate challenges of supporting the global recovery and mid- term shared objectives.

Based on the framework were adopted a range of policy options that will later be discussed in detail at the June 2010 Toronto Summit, according to the communique.