Former CEO Shafqat Malik, who played a key role during the
company’s $5.2 billion bailout by the Abu Dhabi government this
year, resigned after five years at the company, earlier this
month.
1. We, the G-20 Finance Ministers and Central Bank
Governors, met at a time of heightened tensions and significant
downside risks for the global economy that need to be addressed
decisively to restore confidence, financial stability and
growth.2. We have progressed in delivering the commitments we made
three weeks ago in Washington DC. In particular, we welcome the
adoption of the ambitious reform of the European economic
governance. We also welcome the completion by Euro area
countries of the actions necessary to implement the decisions
taken by Euro area Leaders on 21 July 2011 to increase the
capacity and the flexibility of the EFSF. We look forward to
further work to maximize the impact of the EFSF in order to
avoid contagion, and to the outcome of the European Council on
October 23 to decisively address the current challenges through
a comprehensive plan. We made progress on our action plan of
coordinated policies for consideration by our Leaders at the
Cannes Summit. This action plan will encompass a set of measures
to address immediate vulnerabilities and strengthen the
foundations for a strong, sustainable and balanced growth
whereby:
- Advanced economies, taking into account different national
circumstances, will adopt policies to build confidence and
support growth, and implement clear, credible and specific
measures to achieve fiscal consolidation. Those with large
current account surpluses will also implement policies to shift
to growth based more on domestic demand. Those with large
current account deficits will implement policies to increase
national savings;
- Emerging market economies will adjust macroeconomic policies,
where needed, to maintain growth momentum in the face of
downside risks, contain inflationary pressures and
endeavor to enhance resilience in the face of volatile capital
flows; Surplus emerging market economies will accelerate the
implementation of structural reforms to rebalance demand
toward more domestic consumption, supported by continued efforts
to move toward more market-determined exchange rate systems and
achieve greater exchange rate flexibility to
reflect economic fundamentals;
- All countries will undertake further structural reforms to
raise potential growth;
- In all of our actions we will strive to foster growth, job
creation and promote social inclusion.
We remain committed to take all necessary actions to preserve
the stability of banking systems and financial markets. We will
ensure that banks are adequately capitalized and have sufficient
access to funding to deal with current risks. Central banks have
recently taken decisive actions to this end and will continue to
stand ready to provide liquidity to banks as required. Monetary
policies will maintain price stability and continue to support
economic recovery.3. We are taking concrete steps to build a more stable and
resilient IMS to help both deal with the current stress and
promote longer-term stability. We agreed on coherent conclusions
to guide us in the management of capital flows in order to deal
with the risks and reap the benefits from cross-border capital
flows. To further reach these objectives, we agreed on an action
plan to support the development and deepening of local currency
bond markets. We welcomed the recent improvements to IMF
surveillance and will review further progress by the Cannes
Summit notably on enhancements towards a more integrated,
even-handed and effective surveillance framework, particularly
on financial sector coverage, fiscal, monetary and exchange rate
policies.We adopted common principles for cooperation between the IMF
and Regional Financial Arrangements. As a contribution to a more
structured approach, we called on the IMF to further
consider new ways to provide on a case by case basis short-term
liquidity to countries facing exogenous, including systemic,
shocks building on existing instruments and facilities and
called on the IMF to develop concrete proposals by the Cannes
Summit. In addition, we recognize that central banks play a
major role in addressing global liquidity shocks. We committed
that the IMF must have adequate resources to fulfill its
systemic responsibilities and look forward to a discussion of
this in Cannes. We call for the full implementation of the 2010
quota and governance reform of the IMF, as agreed. We look
forward to making progress by the Cannes Summit on a
criteria-based path to broaden the SDR basket, as a contribution
to the evolution of the IMS, based on the existing criteria. We
will continue our work on assessing developments on global
liquidity, country specific analysis of drivers of reserve
accumulation, avoiding persistent exchange rates misalignments,
and the role of the SDR.We reaffirmed our shared interest in a strong and stable
international financial system, and our support for
market-determined exchange rates. We reiterate that excess
volatility and disorderly movements in exchange rates have
adverse implications for economic and financial stability.4. We are more determined than ever to reform the financial
sector to better serve the needs of our economies. We reaffirm
our commitment to implement fully, consistently and in a
nondiscriminatory way agreed reforms on OTC derivatives, all
Basel agreements on banking regulation within agreed timelines
and reducing overreliance on external credit ratings. We
endorsed a comprehensive framework to reduce the risks posed by
SIFIs, including strengthened supervision, key attributes of
effective resolution regimes, a framework for cross-border
cooperation and recovery and resolution planning as well as
additional loss absorbency requirements for those banks
determined as SIFIs; now that the framework applicable to SIFIs
is agreed we urge the FSB to define the modalities to extend
expeditiously the framework to all SIFIs. We agreed on initial
recommendations and a work plan to strengthen regulation and
oversight of shadow banking; we welcomed the joint IMF/WB/FSB
report on financial stability issues in emerging markets and
developing economies; endorsed the FSB report and the common
principles on financial consumer protection prepared by OECD
with FSB and call for further work on implementation issues;
endorsed the progress report of the FSB OTC derivatives working
group to ensure proper coordination and sequencing, and agreed
on the importance of the work to set margining standards on
non-centrally cleared OTC derivatives; endorsed the IOSCO report
on commodity derivatives markets and called IOSCO to report on
implementation of its recommendations by end 2012. We endorsed
first recommendations by IOSCO on market integrity
and call for further work by mid-2012. We welcomed initial work
by FSB/IMF/BIS on macroprudential policy and look forward to
further work in 2012. We underscored our support for a global
legal entity identifier system which uniquely identifies parties
to financial transactions with an appropriate governance
structure representing public interest. We reaffirmed our
objective to achieve a single set of high quality global
accounting standards. We look forward to discussion of progress
made in tackling non-cooperative jurisdictions and tax havens in
Cannes. We underlined in particular the importance of
comprehensive tax information exchange and encourage competent
authorities to continue their work in the Global Forum to assess
and better define the means to improve it. We agreed on a
coordinated framework for monitoring implementation of our
financial regulation agenda, including enhanced monitoring of
Basel II, II-5 and III implementation, setting up a peer review
council for GSIFI policies, a coordination group on OTC
derivatives complementing the OTC derivatives working group, and
an ongoing monitoring and public reporting on compensation
practices focused on remaining gaps and impediments to full
implementation of FSB standards and principles on compensation,
and also reviewed a scoreboard to track progress for our
Leaders. To ensure that the FSB keeps pace with our ambitious
financial regulation agenda, we commit to strengthen its
capacity, resources and governance building on its Chair’s
preliminary proposals and call for first steps to be implemented
by the end of this year.5. The proper functioning of commodity markets is key for
sustained global economic growth. We reaffirm our commitment to
improve the timeliness, completeness and reliability of the
JODI-Oil database and call on IEF, IEA and OPEC to regularly
assess our progress. We commit to work on contributing to the
JODI-Gas database, on the basis of the same principles, call for
further work on gas and coal market transparency and will review
progress in 2012. Building on the January 2011 Riyadh meeting,
we call for annual symposiums on short, medium and long term
outlook and forecasts for oil, gas and coal. We ask IOSCO, in
collaboration with IEA, IEF and OPEC, to prepare recommendations
to improve the functioning and oversight of Price Reporting
Agencies for mid-2012. We reaffirm our commitment to rationalize
and phase-out inefficient fossil fuel subsidies in the medium
term, while providing targeted support for the poorest.6. We welcome the MDBs Infrastructure Action Plan and the
HLP recommendations to be presented to our Leaders in Cannes for
promoting enabling environment, diversifying sources of funding
and identifying exemplary infrastructure investment projects. We
call on the MDBs, working with countries involved to pursue
implementation of transformational regional infrastructure
projects following the criteria set by the HLP and to prioritize
project preparation financing. We emphasize the importance of
this agenda and welcome regular updates from MDBs on the
progress achieved.We welcome the GPFI progress report and encourage further
efforts to achieve universal access to financial services. We
call on MDBs to assist their clients scale up use of risk
management tools that help mitigate the impact of food price
volatility.7. We debated options for innovative financing, as well as a
range of different financial taxes, and look forward to Bill
Gates’ report on financing for development. We discussed the
World Bank-IMF-OECD-RDBs report on mobilizing climate finance
and the recommendations of Trevor Manuel based on this report,
taking into account the principles of UNFCCC. We call for
further work by MDBs and UN organizations. We look forward to an
effective design for the Green Climate Fund, based on the work
of the Transitional Committee as an element of a balanced
outcome of Durban.8. We thank France for hosting the Finance Ministers and
Central Bank Governors’ meetings this year and welcome Mexico as
chair in 2012.
* Agency trying to cut costs amid billion-dollar lossesBy Lily KuoWASHINGTON, Oct 12 (Reuters) - Rural communities across the
United States are fighting back against the U.S. Postal
Service’s plans to close thousands of post offices, bogging
down the cash-strapped agency with time-consuming appeals.The Postal Service has said it needs to downsize
drastically or it will be unable to deliver mail by the end of
next summer.It is losing billions of dollars each quarter because its
core business of delivering mail has eroded as consumers have
turned to email and paying bills online.While awaiting a congressional overhaul of its business
structure, the Postal Service is exploring cost-cutting options
of its own, including a review of about 3,700 post offices for
possible closure.But a flood of appeals threatens to slow down that plan.”We are getting a much heavier number of appeals now,”
Stephen Sharfman, general counsel for the Postal Regulatory
Commission said at a public meeting on Wednesday.Residents are opposing the shuttering of their local post
office for fear it would add to already high unemployment
rates, curtail their mail services, or tarnish a long-standing
American tradition.Members of the commission said it had received 967 letters
and emails last month from people concerned about the possible
closure of their individual post offices or branches.Since July, the commission has received 90 formal appeals,
which trigger a time-consuming process of reviewing how the
Postal Service makes its decisions.The mail carrier must show it considered the impact of a
post office closing on the community it serves and whether a
closing detracts from its mandate to provide mail service to
all communities in the country. The commission decides whether
or not to uphold the Postal Service’s decision.Many of the postal centers under review are in rural areas,
and some lawmakers have spoken up to protect their post offices
in their states.Last week Senator Max Baucus of Montana issued a statement
disputing closure notices in his state on the grounds the
Postal Service had not given community members a full week to
comment, as is required.Public resistance complicates efforts by legislators
searching for ways to save the troubled mail carrier.The Postal Service has until Nov. 18 to make a $5.5 billion
payment to a retiree healthcare fund originally due at the end
of September, which it has said it will not be able to pay.It also faces the risk of bumping up against $15 billion
government borrowing limit.The Postal Service has called on Congress to provide relief
by allowing the agency to end Saturday mail delivery, raise
rates and restructure its labor cost obligations.Ann Fisher, director of the Postal Regulatory Commission’s
office of public affairs, said she expected lawmakers to agree
on a plan for the Postal Service in time to submit it to a
congressional panel charged with cutting the U.S. deficit.The 12-member panel needs to come up with a deficit plan
and vote on it by Nov. 23.On Thursday, members of the House of Representatives
Oversight Committee are to debate a bill by Republican Darrell
Issa, which is seen as a leading piece of legislation to reform
the Postal Service.
Nowotny’s comments suggest the state of the economy remains the larger concern.”One need not have any fear of inflation… We expect a clear decline of inflation, under the 2 percent mark in the second half of 2012,” news agency Market News International quoted Nowotny as saying late on Tuesday.Euro zone inflation jumped to 3.0 percent last month but Nowotny, Austria’s central bank chief, said it should drop clearly below the ECB’s preferred level of 2 percent in the second half of next year.A greater concern was the economic outlook.”What one must fear is the real economy,” he said.”There is the risk that we will enter a relatively long phase of weaker growth. Because the dynamic of exports is dwindling and at the same time we see weak domestic demand because of the consolidation of public finances.”Governments are tightening their budgets in response to the euro zone sovereign debt crisis, a factor a leading Austrian corporate executive said was impacting business prospects.”Consumers’ uncertainty about the debt crisis is beginning to hit the real economy,” Voestalpine Chief Executive Wolfgang Eder told the Financial Times Deutschland paper.Speaking in Riga, outgoing ECB policymaker Juergen Stark said the euro zone was not a transfer union in which member states are liable for each others’ debts. He pressed governments in the bloc to tackle their own debt problems.The troubles facing some euro zone countries highlight the need for sustainable fiscal policies, said Stark, who is resigning early from the ECB this year in protest at its policy of buying bonds to help troubled euro zone debtor states.The ECB has faced sharp criticism in Stark’s native Germany for buying bonds — a move many in the euro zone’s leading economy see as taking the bank into the fiscal arena and threatening its core role of fighting inflation.”Stability begins at home,” Stark, a member of the ECBs Executive Board, said in a speech at a Bank of Latvia.”The euro area is not a transfer union,” he added. “And I have been and remain to be a strict opponent to this issue of transfer union.”ECB President Jean-Claude Trichet said Greece, the country at the origin of the euro zone debt crisis, could avoid bankruptcy if it and European governments stick to their agreements to cut its debt levels.”The commitments made by Greece and those made by all the European countries on 21 July should enable the scenario you mention to be avoided, and we have always warned the governments against it,” he told French weekly L’Express.
