Gordon Brown and his counterparts from Canada, South Korea, France and the US have written to other G20 countries to reiterate leaders’ agreement to work together to reform the international financial institutions and promote economic growth at the next summits in Toronto and Seoul.
The Prime Minister and his counterparts from Canada, South Korea, France and the US have written to other G20 countries to urge them to continue to work towards international cooperation on economic policy.
The letter, which comes almost exactly a year after the UK hosted the G20 Summit in London, calls for leaders to deliver on the ambitious reform agenda agreed in London and the subsequent meeting in Pittsburgh.
It also reiterates leaders’ agreement to work together to reform international financial institutions and promote economic growth at the next summits in Toronto and Seoul.
The letter said:
“Now is the time for the Leaders of the G20 both to recommit themselves and deliver on the ambitious reform objectives and agenda we have already agreed to and to explore cooperative approaches to meeting our common goals. We all know that an agreement to act is just a start. It is acting on the agreement that matters.
“We are all accountable. The challenges we face are great, but the rewards of success are greater still. We are confident that, by acting together, with common purpose and shared resolve, we can deliver the sustainable growth and prosperity our citizens deserve.”
We all have a mutual responsibility to deliver on all our commitments to address the weaknesses that led to the financial crisis. This will require that we maintain our vigilance to address the required reforms and guard against complacency as our economies recover.
There can be no let up in the commitment to:
- develop, by the end of this year, strong international rules on capital and liquidity so that banks have the level and quality of resources they need to cover the risks they take, supplemented by a fully harmonized leverage ratio as an element of the Basel framework. These new rules must be implemented as soon as financial conditions improve and the economic recovery is assured, with the aim of national implementation by end-2012. All major financial centres must also have adopted the Basel II framework by 2011;
- Strengthen the infrastructure of key financial markets to enhance their resilience and reduce the risks of contagion. Standardised over-the-counter derivatives contracts should be traded on exchanges or electronic platforms, where appropriate, cleared through central clearing counterparties by 2012 at the latest, and reported to trade repositories;
- address together the remuneration practices that encourage short-term and excessive risk taking by fully implementing the internationally-agreed compensation standards as set out by the Financial Stability Board;
- Move forward to create a framework to address cross-border resolutions of systemically important financial institutions. This should include establishing crisis management groups for major cross-border firms and resolution tools and frameworks that will reduce moral hazard. Prudential standards for systemically important institutions should be proportional with the costs of their failure; and,
- honouring our commitments to lead by example by implementing international standards and agreeing to undergo periodic peer reviews to evaluate our adherence to these standards. Achieving the ambitious peer review agenda that has been set for 2010 will be an important milestone.
Signed by:
Stephen Harper, Prime Minister of Canada
Lee Myung-Bak, President of the Republic of Korea
Gordon Brown, Prime Minister of the UK
Barack Obama, President of the United States of America
Nicolas Sarkozy, President of France
© G-20
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