At their summit in London Thursday, the leaders of the G20 made US$1.1 trillion in commitments to revive global economic growth.

The biggest component of that is a pledge to triple the IMF’s resources to US$750 billion, US$250 billion to support global trade finance and US$100 billion of additional lending to multilateral development banks. “Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale,” the leaders said in their statement.

The statement indicated that the various members of the G20 are also committed “to take all necessary actions to restore the normal flow of credit through the financial system and ensure the soundness of systemically important institutions”.

They also noted that major failures in the financial sector and in financial regulation and supervision were fundamental causes of the crisis, which they plan to address through “much greater consistency and systematic cooperation between countries”, including: establishing a new Financial Stability Board to succeed the Financial Stability Forum, including all G20 countries, FSF members, Spain, and the European Commission.

Additionally, they pledged to: reform regulation to monitor macro-prudential risks; extend regulation and oversight to all systemically important financial institutions, including large hedge funds; regulate credit rating agencies; implement the FSF’s new principles regarding sustainable compensation schemes and the corporate social responsibility; to take action, once recovery is assured, to improve the quality, quantity, and international consistency of capital in the banking system; and, they said they’d call on the accounting standard setters to improve standards on valuation and provisioning and achieve a single set of global accounting standards.

IE