The G-20 final communique is here. Adam Posen gave us a preview of the document on Wednesday's podcast, and the final draft mentions many of the agenda items he discussed. It says:
The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy.
The communique also highlights a declaration, "Strengthening the Financial System," which calls for establishing a new Financial Stability Board, as a successor to the Financial Stability Forum. The declaration says the FSB will work with the IMF to provide "early warning of macroeconomic and financial risks and the actions needed to address them." More specifically:
-to reshape our regulatory systems so that our authorities are able to identify and take account of macro-prudential risks
-to call on the accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards
-to extend regulation and oversight to all systemically important financial institutions, instruments and markets. This will include, for the first time, systemically important hedge funds
-to endorse and implement the FSF's tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms
-to take action, once recovery is assured, to improve the quality, quantity, and international consistency of capital in the banking system. In future, regulation must prevent excessive leverage and require buffers of resources to be built up in good times
-to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information
-to extend regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice, particularly to prevent unacceptable conflicts of interest
We'll check in with Adam Posen on Friday's podcast to get his take on the final draft.
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