Mr. Dominique
Strauss-Kahn,
Managing Director of
the International
Monetary Fund (IMF),
today welcomed the
outcome of the G-20
Summit on Financial
Markets and the
World Economy,
calling the agreed
action plan a
significant step by
the international
community toward
stronger cooperation
aimed at resolving
the global financial
crisis, and
supporting the IMF's
capacity to
contribute to these
efforts.
"Today's
Summit was
significant because
of the people
present. A new world
economic order is
developing that is
more dynamic and
more inclusive than
any we have yet
seen," Mr.
Strauss-Kahn said.
"The meetings are
also significant
because of what was
agreed. The most
important outcome of
this weekend's
meeting is agreement
on an action plan
and the commitment
of all participants
to implement the
plan vigorously and
fully. The IMF will
give strong support
to these efforts, as
called for by the
G-20."
"I am very
pleased about the
G-20 leaders' strong
support for the
important role of
the Fund in crisis
management and the
reform of the
international
financial
architecture," Mr.
Strauss-Kahn said.
"In addition to
helping some member
countries that are
facing difficult
circumstances with
rapid and effective
support, we have
also created a new
short-term liquidity
facility and
continue to review
our instruments and
facilities."
Mr. Strauss-Kahn
noted the G-20
leaders' commitment
to act together to
meet global
macroeconomic
challenges, using
both monetary and
fiscal policy. Lower
inflation risks
provide room to ease
monetary policy, he
said, adding that
this will be
important, but will
not be enough.
"I welcome the
emphasis on fiscal
stimulus, which I
believe is now
essential to restore
global growth," Mr.
Strauss-Kahn said.
"Each country's
fiscal stimulus can
be twice as
effective in raising
domestic output
growth if its major
trading partners
also have a stimulus
package."
He noted that the
Summit Declaration
recognizes that some
countries have more
room for maneuver
than others. "We
believe that those
countries-advanced
and emerging
economies-with the
strongest fiscal
policy frameworks,
the best ability to
finance fiscal
expansion, and the
most clearly
sustainable debt
should take the
lead," he said.
Mr. Strauss-Kahn
also welcomed the
leaders' commitment
to strengthen the
IMF's resources and
capacity. In this
connection, he again
thanked Prime
Minister Aso for
Japan's generous
offer to provide
US$100 billion to
the IMF to support
lending to countries
hit by the crisis.
Mr. Strauss-Kahn
noted the G-20's
endorsement of
strengthening the
IMF's mandate in the
areas of
macroeconomic
surveillance,
lending to member
countries in need,
and providing
assistance to build
up capacity in
emerging market and
developing
countries. "I am
particularly pleased
about the commitment
of all G-20 members
to undertake
Financial Sector
Assessment
Programs," he added.
"The IMF is prepared
to begin work
immediately on such
assessments for the
G-20 countries that
have not yet had an
FSAP."
Mr. Strauss-Kahn
welcomed the
agreement that the
role of the IMF in
providing
macro-financial
policy advice would
be strengthened,
including the
request that the
Fund and others
develop
recommendations to
mitigate
pro-cyclicality in
regulatory regimes.
"This is very
important at this
time," he added.
He also noted the
G-20's commitment to
refrain from raising
new barriers to
trade and investment
during the next 12
months. "Open trade
and investment is
very important for
growth," he said.
"The Declaration
also sends an
important signal
that the world is
committed to
ensuring that the
IMF, World Bank, and
other multilateral
development banks
have sufficient
resources to help
our members overcome
the crisis," Mr.
Strauss-Kahn said.
Mr. Strauss-Kahn
also noted that the
action plan pointed
to the role of the
IMF in supporting
its implementation,
including some
immediate actions by
March 31, 2009. He
praised the
agreement on
principles for
reform of financial
markets, and
especially the
commitments to
reinforce
international
cooperation. "The
IMF's role in reform
of financial markets
is based on our
responsibility for
surveillance of the
global financial
system, which was
part of the original
Bretton Woods
agreement," he said.
"It is also based on
our capacity to
analyze the
relationships
between financial
markets and the real
economy. We have
already seen how
important these
relationships can
be. The world must
understand them
better, and the IMF
will do its part to
make this happen."
"I am very happy
that we now have
many countries
engaged in the
discussions, both
directly and through
international
organizations,
including the IMF,
which represents
almost every country
in the world. And I
am very pleased with
how the first round
of discussions has
gone," Mr.
Strauss-Kahn said.
