Global leaders agree on IMF reform, strengthened regulatory regimes

By Hwang Doo-hyong

WASHINGTON, Nov. 15 (Yonhap) -- Leaders of the world's 20 largest economies Saturday agreed to strengthen regulatory regimes for financial institutions to head off a recurrence of the ongoing global financial crisis blamed on inadequate oversight.

In a declaration adopted at the end of the one-day G20 economic summit held at
the National Building Museum here, the leaders also concurred that they will
pursue reform of the International Monetary Fund and the Financial Stability
Forum so they could be better represented by developing countries in a changing
global financial environment.
The leaders assigned their finance ministers to "initiate processes and a
timeline" for concrete proposals for enhanced oversight and regulatory regimes by
the end of March so they could get together again in Europe by April 30 "to
review the implementation of the principles and decisions agreed today."
"We pledge to strengthen our regulatory regimes, prudential oversight, and risk
management, and ensure that all financial markets, products and participants are
regulated or subject to oversight, as appropriate to their circumstances," the
declaration said. "We will exercise strong oversight over credit rating agencies,
consistent with the agreed and strengthened international code of conduct."
The leaders, however, cautioned against such enhanced regulatory measures
stifling innovation and discouraging expanded trade in financial products and
services.
Also agreed upon was increased cooperation among national and regional regulators
on cross-border capital flows.
On the reform of international financial institutions, the declaration said, "We
are committed to advancing the reform of the Bretton Woods Institutions so that
they can more adequately reflect changing economic weights in the world economy
in order to increase their legitimacy and effectiveness."
"In this respect, emerging and developing economies, including the poorest
countries, should have greater voice and representation," it said. "The Financial
Stability Forum (FSF) must expand urgently to a broader membership of emerging
economies, and other major standard setting bodies should promptly review their
membership."
The leaders also underscored the importance of rejecting protectionism.
"In this regard, within the next 12 months, we will refrain from raising new
barriers to investment or to trade in goods and services, imposing new export
restrictions, or implementing World Trade Organization (WTO) inconsistent
measures to stimulate exports," the declaration said. "Further, we shall strive
to reach agreement this year on modalities that leads to a successful conclusion
to the WTO???s Doha Development Agenda with an ambitious and balanced outcome."
They also pledged to use fiscal measures and monetary policy to stimulate
domestic demand.