G20 must guard, strengthen economic recovery: Obama
Saturday, 19 June 2010
WASHINGTON, June 18 (AFP): Top world economies must step up crucial financial reforms in order to "maintain the momentum" of global economic recovery, US President Barack Obama told G20 leaders in a letter released Friday.
"We worked exceptionally hard to restore growth; we cannot falter or lose strength now," he said in a message to the leaders ahead of a June 26-27 summit in Toronto amid concerns over the pace of global economic recovery.
Obama said the meeting would take place "at a time of renewed challenge to the global economy," and laid out an action plan of issues he hopes the summit will tackle, including financial reforms.
"To support the recovery and strengthen the ability of our financial systems to deliver needed credit, we must maintain the momentum of financial repair."
He offered a checklist of items that should be embraced, including stricter capital requirements and derivatives oversight, increased transparency and disclosure "to promote market integrity and reduce market manipulation," and a mechanism for winding down global financial firms.
"We want our negotiators to reach agreement on a new capital framework we can endorse in Seoul that will include higher common equity requirements, tighter definitions of capital, a simple mandatory leverage ratio, and appropriate liquidity requirements," Obama said.
Following Toronto, a G20 Summit will be held November 11-12 in the South Korean capital.
In improving oversight of derivatives -- the complex financial instruments implicated in sparking the 2008 financial crisis -- Obama urged "supervision and regulation, including conservative capital and margin requirements, disclosure and reporting requirements, and strong business conduct standards to mitigate the potential for systemic risk and market abuse."
"We worked exceptionally hard to restore growth; we cannot falter or lose strength now," he said in a message to the leaders ahead of a June 26-27 summit in Toronto amid concerns over the pace of global economic recovery.
Obama said the meeting would take place "at a time of renewed challenge to the global economy," and laid out an action plan of issues he hopes the summit will tackle, including financial reforms.
"To support the recovery and strengthen the ability of our financial systems to deliver needed credit, we must maintain the momentum of financial repair."
He offered a checklist of items that should be embraced, including stricter capital requirements and derivatives oversight, increased transparency and disclosure "to promote market integrity and reduce market manipulation," and a mechanism for winding down global financial firms.
"We want our negotiators to reach agreement on a new capital framework we can endorse in Seoul that will include higher common equity requirements, tighter definitions of capital, a simple mandatory leverage ratio, and appropriate liquidity requirements," Obama said.
Following Toronto, a G20 Summit will be held November 11-12 in the South Korean capital.
In improving oversight of derivatives -- the complex financial instruments implicated in sparking the 2008 financial crisis -- Obama urged "supervision and regulation, including conservative capital and margin requirements, disclosure and reporting requirements, and strong business conduct standards to mitigate the potential for systemic risk and market abuse."