CANNES, France (MNI) – The following is the G20 Communique issued
Friday:
G20 Leaders Summit — Cannes — 3-4 November 2011
1. We, the Leaders of the G20, met in Cannes on 3-4 November 2011.
2. Since our last meeting, global recovery has weakened,
particularly in advanced countries, leaving unemployment at unacceptable
levels. In this context, tensions in the financial markets have
increased due mostly to sovereign risks in Europe; there are also clear
signs of a slowing in growth in the emerging markets. Commodity price
swings have put growth at risk. Global imbalances persist.
3. Today, we reaffirm our commitment to work together and we have
taken decisions to reinvigorate economic growth, create jobs, ensure
financial stability, promote social inclusion and make globalization
serve the needs of the people.
A global strategy for growth and jobs
4. To address the immediate challenges faced by the global economy,
we commit to coordinate our actions and policies. Each of us will play
their part.
5. We have agreed on an Action plan for Growth and Jobs to address
short term vulnerabilities and strengthen medium-term foundations for
growth.
Advanced economies commit to adopt policies to build confidence and
support growth and implement clear, credible and specific measures to
achieve fiscal consolidation. We welcome the decisions by European
Leaders on October 26th, 2011 to restore debt sustainability in Greece,
strengthen European banks, build firewalls to avoid contagion, and lay
the foundations for robust economic governance reform in the Euro area
and call for their swift implementation. We support the measures
presented by Italy in the Euro Summit and the agreed detailed assessment
and monitoring by the European Commission. In this context, we welcome
Italy’s decision to invite the IMF to carry out a public verification of
its policy implementation on a quarterly basis. Taking into account
national circumstances, countries where public finances remain strong
commit to let automatic stabilizers work and take discretionary measures
to support domestic demand should economic conditions materially worsen.
Countries with large current account surpluses commit to reforms to
increase domestic demand, coupled with greater exchange rate
flexibility. We all commit to further structural reforms to raise output
in our countries. Monetary policies will maintain price stability over
the medium term and continue to support economic recovery.
6. We are determined to strengthen the social dimension of
globalization. We firmly believe that employment and social inclusion
must be at the heart of our actions and policies to restore growth and
confidence. We therefore decide to set up a G20 task force which will
work as a priority on youth employment. We recognize the importance of
social protection floors in each of our countries, adapted to national
situations. We encourage the ILO to continue promoting ratification and
implementation of the eight core Conventions ensuring fundamental
principles and rights at work.
7. Convinced of the essential role of social dialogue, we welcome
the outcomes of the B20 and L20 and their joint statement.
Towards a more stable and resilient International Monetary System
8. We have made progress in reforming the international monetary
system to make it more representative, stable and resilient. We have
agreed on actions and principles that will help reap the benefits from
financial integration and increase the resilience against volatile
capital flows. This includes coherent conclusions to guide us in the
management of capital flows, common principles for cooperation between
the IMF and Regional Financial Arrangements, and an action plan for
local currency bond markets. We agree that the SDR basket composition
should continue to reflect the role of currencies in the global trading
and financial system. The SDR composition assessment should be based on
existing criteria, and we ask the IMF to further clarify them. To adjust
to currencies’ changing role and characteristics over time, the
composition of the SDR basket will be reviewed in 2015, or earlier, as
currencies meet the existing criteria to enter the basket. We are also
committed to further progress towards a more integrated, even-handed and
effective IMF surveillance and to better identify and address spill-over
effects. While continuing with our efforts to strengthen surveillance,
we recognize the need for better integration of bilateral and
multilateral surveillance, and we look forward to IMF proposals for a
new integrated decision on surveillance early next year, and for
increased ownership and traction.
9. We affirm our commitment to move more rapidly toward more
market-determined exchange rate systems and enhance exchange rate
flexibility to reflect underlying economic fundamentals, avoid
persistent exchange rate misalignments and refrain from competitive
devaluation of currencies. We are determined to act on our commitments
to exchange rate reform articulated in our Action plan for Growth and
Jobs to address short term vulnerabilities and restoring financial
stability and strengthen the medium-term foundations for growth. Our
actions will help address the challenges created by developments in
global liquidity and capital flows volatility, thus facilitating further
progress on exchange rate reforms and reducing excessive accumulation of
reserves.
10. We agreed to continue our efforts to further strengthen global
financial safety nets and we support the IMF in putting forward the new
Precautionary and Liquidity Line (PLL) to provide on a case by case
basis increased and more flexible short-term liquidity to countries with
strong policies and fundamentals facing exogenous shocks. We also
support the IMF in putting forward a single facility to fulfil the
emergency assistance needs of its members. We call on the IMF to
expeditiously discuss and finalize both proposals.
11. We welcome the euro area’s comprehensive plan and urge rapid
elaboration and implementation, including of country reforms. We welcome
the euro area’s determination to bring its full resources and entire
institutional capacity to bear in restoring confidence and financial
stability, and in ensuring the proper functioning of money and financial
markets.
We will ensure the IMF continues to have resources to play its
systemic role to the benefit of its whole membership, building on the
substantial resources we have already mobilized since London in 2009. We
stand ready to ensure additional resources could be mobilised in a
timely manner and ask our finance ministers by their next meeting to
work on deploying a range of various options including bilateral
contributions to the IMF, SDRs, and voluntary contributions to an IMF
special structure such as an administered account. We will expeditiously
implement in full the 2010 quota and governance reform of the IMF.
Reforming the financial sector and enhancing market integrity
12. In Washington in 2008, we committed to ensure that all
financial markets, products and participants are regulated or subject to
oversight, as appropriate. We will implement our commitments and pursue
the reform of the financial system.
13. We have agreed on comprehensive measures so that no financial
firm can be deemed “too big to fail” and to protect taxpayers from
bearing the costs of resolution. The FSB publishes today an initial list
of Global systemically important financial institutions (G-SIFIs).
G-SIFIs will be submitted to strengthened supervision, a new
international standard for resolution regimes as well as, from 2016,
additional capital requirements. We are prepared to identify
systemically important non-bank financial entities.
14. We have decided to develop the regulation and oversight of
shadow banking. We will develop further our regulation on market
integrity and efficiency, including addressing the risks posed by high
frequency trading and dark liquidity. We have tasked IOSCO to assess the
functioning of Credit Default Swaps markets. We have agreed on
principles to protect financial services consumers.
15. We will not allow a return to pre-crisis behaviours in the
financial sector and we will strictly monitor the implementation of our
commitments regarding banks, OTC markets and compensation practices.
16. Building on its achievements, we have agreed to reform the FSB
to improve its capacity to coordinate and monitor our financial
regulation agenda. This reform includes giving it legal personality and
greater financial autonomy. We thank Mr Mario Draghi for the work done
and we welcome the appointment of Mr Mark Carney, Governor of the
Central Bank of Canada as Chairman of the FSB, and of Mr. Philipp
Hildebrand, Chairman of the Swiss National Bank as Vice-Chairman.
-more-
** Market News International **
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