World leaders gathered at the G-20 financial summit in Washington agreed on Saturday that more needs to be done to strengthen the global economy, revive growth, and improve the regulation of financial markets, leaving individual countries the details on how to do so.
In a joint statement released after five hours of talks in Washington, G-20 leaders called for a "broad political response" to the possibility of a deep recession, emphasizing that countries need to act "according to domestic conditions." "Economic momentum is significantly weakening in major economies, and global prospects have deteriorated," the statement assesses.
The G-20, which brings together the most developed countries and emerging economies such as China, India, Brazil, Mexico, and South Korea, which together account for 90 percent of global GDP, warns in a statement from its first summit against raising new trade barriers, calls for additional resources for the International Monetary Fund (IMF), and sets March as the deadline for recommendations on additional actions to improve accounting standards, strengthen the financial derivatives market, and enhance oversight of hedge funds and credit rating agencies.
"Policymakers, regulators, and supervisors in some developed countries have not adequately assessed and paid attention to the rising risks in financial markets, have not kept pace with financial innovations, or considered the systemic consequences of domestic regulatory actions," G-20 leaders emphasize in the part of the statement dedicated to identifying the causes of the current crisis. G-20 leaders agreed on the need for reforms of the global financial system to prevent new crises. "We must lay the groundwork for reforms to ensure that global crises, like this one, do not recur," they stressed in the statement.
