Finance

Home page

Finance

G8 agree to develop common standards for finance

16 June 2009 08:35 (UTC +04:00)

Baku â€“ APA-Economics. Top financial officials from the Group of Eight (G8) industrialized nations on Friday issued an upbeat evaluation of the global financial crisis, describing signs that markets were stabilizing around the world and warning that it was necessary to devise â€œexit strategiesâ€ to disengage from stimulus programs that have been put in place.

At the same time, they said itâ€™s premature to rein back more than $2 trillion in stimulus packages.

The G8 met for two days in Lecce, Italy. Eight world finance ministers â€“ including U.S. Treasury Secretary Timothy F. Geithner, and his global counterparts from Britain, Canada, France, Germany, Italy, Japan and Russia â€“ also agreed to create â€œa set of common principles and standards governing the conduct of international business and finance,â€The Washington Post reported.

In a communiquÃ© called â€œthe Lecce Frameworkâ€ â€“ which described the strategy for obtaining those goals â€“ the finance ministers called on government leaders to fill in the regulatory gaps that led to the global financial crisis, including breakdowns caused by financial firms that operated in multiple economies.

The G-8â€™s statement made no reference to currencies or interest rates given the absence of central bankers from the meeting, Bloomberg reported.

German Finance Minister Peer Steinbrueck also said he wasnâ€™t concerned by the euroâ€™s 10 percent climb against the dollar in the past four months.

There are â€œsigns of stabilization,â€ though â€œthe situation remains uncertainâ€ as climbing unemployment and volatile commodity prices present obstacles, the ministers said in their statement.

Strikingly more rigorous initiatives already are being adopted in Europe, where new measures aimed at creating more-rigorous oversight of the credit-rating agencies â€“ especially those involved with creating securitized securities, whose U.S. breakdowns have been identified as a key contributor to the credit crisis. The United States will offer its own broad proposals for â€œmore conservative standardsâ€ when it unveils a much-anticipated reform plan to overhaul domestic financial regulation later this week, Geithner said in an interview after the meeting.

The U.S. will include tougher proposed capital standards and oversight for banks, better coordinated oversight of global financial institutions, and improve monitoring and transparency in global derivatives markets, The Post reported.

â€œBecause risk does not respect borders, we will put forward several international proposals in our reform package to help raise standards globally,â€ Geithner told journalists after the meeting.

With recent rebound in stock markets and a flurry of upbeat economic reports, finance ministers said they were cautiously optimistic about the state of the world economy.