Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Nov 24, 2002 |
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Industry & Economy
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Economy Money & Banking - Forex G-20 for caution on capital account convertibility Our Bureau
The Finance Minister, Mr Jaswant Singh, with the US Treasury Secretary, Mr Paul O'Neill, at the G-20 meeting in the Capital on Saturday.
NEW DELHI, Nov. 23 THE G-20 Finance Ministers and central bank Governors today called for putting in place sound national financial systems and advocated a cautious approach towards capital account convertibility. "We agreed on the need for sound national financial systems, effective supervision and corporate governance in line with best practice. We also agree that capital account liberalisation should proceed in an appropriately sequenced manner," the Finance Minister, Mr Jaswant Singh, said after the two-day conference which ended here today. Mr Singh said that the Group was unanimous in its view that a more orderly process of crisis resolution would help to mitigate the social and economic cost of financial crisis. The Finance Ministers supported further work by the international community in consultation with debtors and creditors on comprehensive and market compatible approaches to crisis resolution. These include collective action clauses, a sovereign debt restructuring mechanism and a code of good practices. In a unanimously adopted charter, the Group committed itself towards removal of trade barriers and phase-out of trade distorting subsidies. The nine-point charter also pledged to take greater action to eliminate terror funding. Mr Singh said the members unanimously agreed to spread the benefits of globalisation to eliminate poverty. "Reduction of the remaining trade and related barriers and phasing out of trade-distorting subsidies would contribute to spreading further the benefits of globalisation including to the poorest developing countries," Mr Singh said quoting the Delhi Communiqué. Participants at the meeting also agreed to continue efforts to eliminate other abuses of the financial system, particularly money laundering. "We pledge to carry forward our work in this regard through support of the activities of the international financial institutions and other relevant international fora, and through appropriate domestic actions," Mr Singh said. He added that the progress on these matters would be reviewed at the next meeting in Mexico in 2003. The communiqué said the finance ministers believed that effective and accountable international financial institutions and worldwide surveillance were essential for a healthy global financial system. "Sustainable exchange rate regime, prudent asset-liability management and implementation of agreed standards and codes are important components of effective strategy for crisis prevention," the communiqué said.
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