G20 Communiqué Meeting of Finance Ministers and Central Bank Governors, Busan, Republic of Korea, 5 June 2010

Sectors : Economic governance and public finance management, Financial Institutions, markets, services and microfinance, Transparency and accountability
Organisation : G20
Date made: 
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Commitments in: Governance - Transparency and accountability

“4. Building on progress to date, we affirmed our commitment to intensify our efforts and to accelerate financial repair and reform. Therefore, we:

• agreed further progress on financial repair is critical to global economic recovery. This requires greater transparency and further strengthening of banks’ balance sheets and better corporate governance of financial firms.

• committed to reach agreement expeditiously on stronger capital and liquidity standards as the core of our reform agenda and in that regard fully support the work of the Basel Committee on Banking Supervision and call on them to propose internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage and risk taking by the November 2010 Seoul Summit. It is critical that our banking regulators develop capital and liquidity rules of sufficient rigor to allow our financial firms to withstand future downturns in the global financial system. As we agreed, these rules will be phased in as financial conditions improve and economic recovery is assured, with the aim of implementation by end-2012. We welcome the progress on the quantitative and macroeconomic impact studies which will inform the calibration and phasing in, respectively. We are committed to move together in a transparent and coordinated way on national implementation of the agreed rules. Implementation of these new rules should be complemented by strong supervision.

• emphasized the need to reduce moral hazard associated with systemically important financial institutions and reinforced our commitment to develop effective resolution tools and frameworks for all financial institutions on the basis of internationally agreed principles. We look forward to the FSB’s interim report to the Toronto Summit.

• agreed the financial sector should make a fair and substantial contribution towards paying for any burdens associated with government interventions, where they occur, to repair the banking system or fund resolution. To that end, recognizing that there is a range of policy approaches, we agreed to develop principles reflecting the need to protect taxpayers, reduce risks from the financial system, protect the flow of credit in good times and bad, taking into account individual country’s circumstances and options, and helping promote level playing field. The IMF will deliver their final report at the Toronto Summit.

• committed to accelerate the implementation of strong measures to improve transparency, regulation and supervision of hedge funds, credit rating agencies, compensation practices and OTC derivatives in an internationally consistent and non-discriminatory way. We called on the FSB to review national and regional implementation in these areas and promote global policy cohesion. We also committed to improve the functioning and transparency of commodities markets.

• expressed the importance we place in achieving a single set of high quality, global accounting standards and urged the International Accounting Standards Board and the Financial Accounting Standards Board to redouble their efforts to that end. We encouraged the International Accounting Standards Board to further improve involvement of stakeholders.

• reaffirmed our commitment to international assessment and peer review across the FSB membership. We also recommit to apply measures and mechanisms to address non-cooperative jurisdictions and ensure compliance, including by providing support. We welcomed the report by the Global Forum on Tax Transparency and Exchange of Information, the progress on the peer review process, and the development of a multilateral mechanism for information exchange open to all countries. We fully support the work of the Financial Action Task Force in the fight against money laundering and terrorist financing and regular updates of a public list on jurisdictions with strategic deficiencies. We welcomed the implementation of the FSB’s evaluation process on the adherence to prudential information exchange and international cooperation standards in all jurisdictions.

• recognized the need to work together so as to foster the wide-spread application of the overarching principles of propriety, integrity and transparency in the conduct of international business and finance.”


Commitments in: Private Sector development and financial services for the poor - Financial Institutions, markets, services and microfinance

“8. We welcomed the significant progress made on financial inclusion with the development of Principles for Innovative Financial Inclusion and stock-taking best practices in SME finance. We call on relevant international standard setting bodies to consider how they can further contribute to encouraging financial inclusion, consistent with their respective mandates. We look forward to tangible deliverables on financial inclusion at the Toronto Summit, including the launch of the SME Finance Challenge...”