G20 Finance Ministers Meeting Reached A Consensus &Nbsp; Committed Not To Fight Currency Wars.

A twenty day group of two days (G20) meetings of finance ministers and central bank governors It ended in October 23rd in Qingzhou, South Korea. The meeting discussed the current global economic situation, "strong, sustainable, balanced growth framework", the reform of international financial institutions and the global financial safety net, and the reform of financial regulation.

After the meeting Joint communiqu G20 members agreed on exchange rate issues. Consensus Commitment avoid " competitive devaluation According to their respective circumstances, measures were taken to promote the realization of current account balance. The parties also reached a "historic agreement" on the IMF share reform and shifted over 6% of the voting rights to the emerging economies. At the same time, they agreed to impose more stringent supervision on banks and big financial companies.

　 Avoid competitive currency devaluation

The joint communique requires members to "develop competitive exchange rate systems that reflect the fundamentals of the economy and more market determined and avoid competitive currency devaluation". Although the meeting failed to set a clear quantitative objective for the current account surplus, the parties promised to maintain their current account at a sustainable level.

The European Union's Governing Council member, Noah 23, said the joint communiqu is aimed at maximizing the stability of the world's major currencies. This commitment will help to reduce excessive fluctuations in the currency.

The joint communiqu pointed out: "advanced economies, including those with reserve currencies, will be vigilant against excessive volatility and disorderly changes in the exchange rate. These actions will help to reduce the risk of excessive capital flows that some emerging economies are facing. Some members believe that the relaxation of monetary policy in the United States may lead to further weakening of the dollar. Analysts pointed out that the above communiqu of the joint communique shows that the G20 finance ministers' meeting recognized this concern.

The joint communique shows that G20 will authorize IMF to investigate "sustained large-scale imbalances" and is committed to studying the sustainability of external imbalances, and to introduce an "spillover effect" report to monitor the international impact of major economic related economic policies.

The joint communique also said that the global economy continued to recover slowly, but the process is fragile and unbalanced, and still faces many downside risks. G20 members promise to achieve strong, sustainable and balanced economic growth through coordination and cooperation, oppose all forms of trade protectionism and reduce trade barriers. {page_break}

　　 Breakthroughs in IMF share reform

Countries have reached a consensus on the reform of the International Monetary Fund (IMF) share. The conference agreed to transfer more than 6% of its share to countries with insufficient representation, including emerging countries, by 2012. At present, the 24 seats of the Executive Board of the organization remain unchanged, and the European countries with 8 seats will give up two of them to enhance the representativeness of emerging markets and developing countries.

One of the major achievements of the G20 finance ministers conference is that the parties finally agreed on the specific targets and progress of the IMF share reform.

According to the joint communique, IMF will "transfer more than 6% of the voting rights to emerging economies and developing countries and countries with low representation, while protecting the voting rights of the poorest countries" and has promised to complete the work before the relevant annual meeting in 2012. However, which countries the 6% voting rights will be specifically divided will be left for discussion at the G20 summit held in Seoul, South Korea in November.

Kahn, President of IMF, said: "this is the most significant governance structure reform in IMF history." He believes that the impact of emerging economies on the global economy is not commensurate with its share in IMF.

G20 agrees that the IMF Council will continue to set up 24 seats, and the European countries with 8 seats will give up two seats to enhance the representativeness of emerging markets and developing countries. Analysts believe that Belgium and Holland are likely to be ranked as "Outgoing" candidates. Analysts expect that after the share reform is completed, China's share will rise from less than 4% to more than 6%, rising from the current sixth to second or third. {page_break}

　　 Strengthening global financial regulation

In addition, the G20 finance ministers' meeting also reached a consensus on financial regulatory reform. The joint communique said it would "complete financial recovery and regulatory reform without delay".

The meeting decided that the same framework would be issued for all G20 members and systemic banks of the financial stability committee member countries, requiring that the additional loss bearing capacity of each large bank should be consistent with the potential systemic risk of the institution. In view of their own different histories and laws, countries will allow them to have separate clauses, but all countries will have consistency in the financial regulatory framework to deal with the crisis. Ultimately, which financial institutions need to increase their ability to bear losses will be determined by national regulators.

Delaki, chairman of the G20 financial stability Committee, said 23, there is no clear timetable for the completion of the global independent resolution of the standards for capital and liquidity of financial institutions. The most important issue at present is to ensure that the regulatory mechanisms of different international financial institutions should have a consistent consistency in coping with the financial crisis.

Delaki said that in addition to issuing a series of new regulations on capital and liquidity supervision, the financial stability committee will receive the qualitative and quantitative criteria for international financial institutions from the Basel Banking Regulatory Commission in the year to determine which banks are "too big to fail" and identify the list of large banks that need to meet more stringent requirements in the middle of 2011.

In October 23rd, Yin Zengxuan, Minister of Korean finance, announced the outcome of the conference at the Hyundai hotel in Qingdao, Korea.