Sandra Fickweil
Monday, March 16, 2009
9:26
After the Group of 20 finance ministers and central bankers met in southern England on Sunday, Timothy Geithner from America said there was a “clear commitment to do what’s necessary, to keep at it, to get the economy on track.”
At the end of the meeting, the International Monetary Fund said that the first global contraction in six decades will arise and it got a commitment to have its resources at least doubled to help it better fight the spreading turmoil.
According to the G20 statement, the key priority is now to address the value of assets held on banks’ balance sheets, which are constraining banks’ lending and damaging economies. The G 20 even set a lot of principles that have to be followed from now on.
Shareholders now have to be exposed by the “maximum possible” to losses or risks before government intervenes, and companies that receive financial help have to be run “according to business principles”.
According to the G20, ties between their individual banking supervisors will be strengthened. The French central bank Governor said that “support for the economy will serve for nothing if the financial system is not fixed”.
The next meeting is assigned on April 2nd and the agenda has already been made at the meeting.
The article also states that Chinese exports are plugged by a record, German factory orders and U.S. consumer confidence is the lowest for 28-years. US as well as the G20 central banks promised further support as long as needed.
As there was a debate about the financial stimulus, the IMF is supposed to monitor budget policies and judge “if more action is needed”. The Italian Finance Minister said “yes to stimulus packages, but without losing sight of feasibility,”, and a representative from France said that they agree to relaunch needs to “go ahead on four wheels”. The German Foreign Minister however said that “it makes no sense to pump more and more money into our economy” when financial markets are still brittle.
The G20 said that the “firepower” of the IMF will be bolstered again and especially smaller countries will be given more instructions on how to spend the money.
Finally the article mentions the members of the G20: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.
I think it is very interesting to observe the debate on how to solve the global financial crisis. Every day we can read in the news different strategies designed by single countries on how to boost their economy. But I think it is very important that we have to collaborate and work together. Each single country is affected and instead of struggling alone, they now try to find the right way to get out of this misery. However in my opinion it gets more difficult the more parties take part in the discussion. If more and more different opinions get together it takes more and more time to find ONE solution.
However it is the right start and although it will take a long time until we can notice improvement, that’s the best way.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aO7r3V1MHMkQ&refer=home
No comments:
Post a Comment