G-20 LONDON SUMMIT 2009
The G-20 London summit was held on April 2 at the ExCeL Centre, London, UK. In this summit, the leaders of the world’s 20 richest nations and some regional organizations, international organizations gathered in London to address the global economic crisis. Main aims of this summit are to work co-operatively to restore stability and stimulate economic growth, reform and improve financial sector & systems and reform international financial institutions (IFIs), International Monetary Fund (IMF), Financial Stability Forum (FSF) and the World Bank.
PREPARATIONS FOR G-20 LONDON SUMMIT 2009
Leaders of the countries started their preparations for this summit earlier to the date. Two official meetings were held on Berlin, Germany, on 22 February 2009 for European leaders and another in Horsham, Sussex, United Kingdom on 14 March 2009 for Finance Ministers for the preparation of this summit. On the first meeting, the leaders agreed that markets, financial institutions and the wide range of financial and hedge funds should be subject to appropriate control and demand effective sanctions against tax havens and also advocated the doubling of funds available to the IMF. On the second meeting, Finance ministers and central bankers decided to approve coordinated and decisive actions to encourage demand and employment. They also guaranteed to fight against all forms of policies and to maintain trade and foreign investments. The members also devoted to maintain the supply of credit by providing more liquidity and to change the capital of the banking system and to implement rapidly the stimulus plans. Central bankers also guaranteed to maintain low-rate policies as long as necessary. Finally, the leaders decided to help emerging and developing countries through a strengthening of the IMF. The participants also proposed to control appropriately all important financial institutions, to register all hedge funds or their managers to strengthen the financial system. They also announced new measures to prevent and resolve crises, through the strengthening of the IMF and the FSF and agreed to control rating agencies and their compliance with the IOSCO Code, off-balance sheet vehicles, credit- derivatives market, and non-cooperative territories. U.K. Prime Minister Gordon Brown visited several countries to secure backing for his goals at the London Summit. He strongly attacked protectionism during his visit to several countries. Before the summit, there had been a growing difference of opinions on the question of implementing Fiscal policy among the leaders. Czech Prime Minister Mirek Topolanek also attacked the economic policies of U.S. President Barack Obama. The highest security was given to this summit. Six police forces including the Metropolitan Police, the City of London Police, British Transport Police and the forces of Essex, Sussex and Bedford shire were to be used for the security. Some protests such as “Stop the War Coalition”, “Camp for Climate Action”, “street party”, “Put People First” etc are also formed in response to this summit.
RESULT OF G-20 LONDON SUMMIT 2009
World leaders reached an agreement which provides US$1.1 trillion to encourage the economic growth which will be distributed for US$500 billion for the IMF to aid struggling economies, US$250 billion to boost world trade, US$250 billion for a new IMF overdraft facility, US$100 billion to assist international development banks in lending to poor countries. An agreement was also made to bring wider global regulation of hedge funds and credit-rating agencies, a common approach to cleaning up bank toxic assets. The leaders also agreed to establish a financial stability forum working with the IMF to ensure wider global co-operation and to provide an early-warning system for future financial crises. Main general agreement of this London Summit is that the U.S. should no longer be as dominant as it has been previously and that there needs to be more government regulations over businesses. Leaders are satisfied with this summit. US President Barack Obama told that it was “very productive” and “historic” and it was the first major step to control the world economic challenges.Really, it is a day that the world came together to fight recession not with words but with a plan for economic recovery and reform.