World leaders unite against crisis, to implement action plan

WASHINGTON, Nov. 16 Kyodo - Leaders of the world's major industrialized and emerging economies united
Saturday against the burgeoning global financial crisis at a landmark summit in
Washington, setting financial reform principles and adopting an action plan to
be implemented by the end of March to ensure such a crisis does not recur.

The Group of 20 leaders vowed in their declaration to ''continue our vigorous
efforts and take whatever further actions are necessary to stabilize the
financial system.'' They agreed to implement the action plan by March 31 and
meet again by the end of next April.
U.S. President George W. Bush, who hosted the two-day historic event, said the
summit was ''very productive'' and ''successful'' because participants reached
''substantive'' agreements. ''All of us committed to continue to work on
pro-growth economic policies,'' he said.
Bush, whose second four-year term expires in late January, vowed a ''seamless''
transition of power to his successor Barack Obama.
French President Nicolas Sarkozy said after the summit the second round of the
global financial summit is likely to be held in London.
Japanese Prime Minister Taro Aso told a press conference, ''The world is
entering a new era. New orders are born whenever we try to overcome crises.''
He then expressed Japan's resolve to play a key role, saying, ''We will lead
the building of a framework for a new era.''
Aso pledged at the summit to contribute up to $100 billion to the International
Monetary Fund to help emerging economies hard-hit by the financial turmoil.
Leaders of the G-20 economies, which together account for almost 90 percent of
the world's gross domestic product, pledged to use fiscal steps to stimulate
domestic demand and boost financial resources of international institutions
such as the IMF so that they can play a significant role in tiding over the
crisis.
IMF Managing Director Dominique Strauss-Kahn cited the need for fiscal stimulus
worth ''at least 2 percent'' of global GDP to be implemented in a concerted
manner.
The 20 leaders agreed on five common principles for reforming financial markets
-- strengthening transparency and accountability, enhancing sound regulations,
promoting integrity in financial markets, reinforcing international cooperation
and reforming international financial institutions.
They will review the implementation of the principles at a next summit. Brazil,
Britain and South Korea, which are leading meetings of G-20 financial ministers
and central bank governors, will be mainly responsible for setting a timeline
for future procedures.
The 47-point action plan is based on the five principles and consists of
high-priority immediate actions to be taken by March 31, 2009, and medium-term
actions.
The leaders also requested their finance ministers to formulate additional
recommendations.
Among steps included in the action plan are strengthening the oversight of
credit agencies, establishing supervisory colleges for about 40 major
cross-border financial institutions, and including more emerging economies as
members of the Financial Stability Forum.
The FSF is an advisory group consisting of fiscal and monetary authorities as
well as financial watchdogs.
The leaders also underscored that the IMF and the World Bank ''must be
comprehensively reformed so that they can more adequately reflect changing
economic weights in the world economy.'' They called for ''greater voice and
representations'' by emerging and developing economies at those entities.
The 20 chiefs also shared the view that protectionism should be rejected and
agreed to ''strive to reach agreement this year'' on details of a comprehensive
accord to conclude the Doha Round of trade liberalization talks under the World
Trade Organization.
During the summit talks, Aso insisted that the U.S. dollar should continue to
be a key currency. He also pointed to the need to pump ample financial
resources into multilateral development banks such as the Asian Development
Bank to support developing economies hit by the crisis, Japanese officials
said.
Participants were not sharply divided over the degree of financial regulations,
with one leader saying that the world should explore a midpoint between
free-market principles and government controls, according to the officials.
They pledged in the declaration to ''ensure that all financial markets,
products and participants are regulated or subject to oversight.''
The G-20 consists of the Group of Seven major industrialized countries --
Britain, Canada, France, Germany, Italy, Japan and the United States -- plus
Argentina, Australia, Brazil, China, India, Indonesia, South Korea, Mexico,
Russia, Saudi Arabia, South Africa, Turkey and the European Union.
==Kyodo