G20 leaders agree six-point plan to tackle economic slump

Leaders from the 20 biggest economic powers agreed on Saturday to a six-point plan for tackling slumping economic activity with stepped-up co-operation, according to a final statement after a Washington summit. The following are the points as listed in the communiqué.
-- Continue our vigorous efforts and take whatever further actions are necessary to stabilise the financial system.
-- Recognise the importance of monetary policy support, as deemed appropriate to domestic conditions.
-- Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.
-- Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and program support.
-- We stress the International Monetary Fund''s (IMF) important role in crisis response, welcome its new short-term liquidity facility, and urge the ongoing review of its instruments and facilities to ensure flexibility.
-- Encourage the World Bank and other multilateral development banks (MDBs) to use their full capacity in support of their development agenda, and we welcome the recent introduction of new facilities by the World Bank in the areas of infrastructure and trade finance.
-- Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.
Earlier, a source close to the talks said that world leaders Saturday set an end of March deadline for concrete proposals on tightening global financial regulation and oversight while boosting market transparency. The heads of state and government from the world''s 20 largest economies are to task their finance ministers with drawing up a series of proposals and recommendations to be put forward by March 31.
Six areas will be specifically targeted: regulating those areas of the financial markets which have exacerbated the crisis, boosting transparency in the often murky derivatives markets and reforming compensation practices. The ministers must also evaluate global accounting norms and the financing needs of international financial institutions.
Finally, they must draw up a list of financial institutions whose collapse would imperil the global financial system. These elements of the action plan were to be published later Saturday in a five-page document accompanying the final communiqué of the G20 summit.
According to the source, the final communiqué said that "regulators must ensure that their actions support market discipline (and) avoid potentially adverse impacts on others countries, including regulatory arbitrages." The leaders also made a "pledge to ... ensure that all financial markets products and participants are regulated or subject to oversight" and they vowed to ward off "illicit financial risks, arising from non-co-operative jurisdictions."
"We will also promote information sharing, including with respect to jurisdictions that have yet to commit to international standards, with respect to bank secrecy and transparency," the communiqué said. On the economic front, the leaders also agreed each country should act "as deemed appropriate to domestic conditions," but stopped short of imposing a co-ordinated international stimulus plan.