G20 Gov`ts Sign Agreement on Battling Economic Crisis

Finance ministers and central bank chiefs from the Group of 20 industrialized and emerging economies have agreed to take every possible measure until global economic growth begins recovery.

The agreement reached Saturday neither had anything especially new nor urged a specific country’s central bank to change its monetary policy. It did, however, show a consensus among participating countries who account of 80 percent of the world economy.

More than anything, the countries agreed to expand liquidity supply, ban recapitalization, and dispose of bad assets under common principles to normalize the troubled financial sector.

A significant degree of agreement was reached in reorganizing international financial organizations. They virtually consented to reconsider the voting rights for the International Monetary Fund from 2011 until 2013 to revise the system of alternate sharing of the fund’s chairmanship between the United States and Europe.

The G20 countries also agreed to strengthen financial regulations since the global economic crisis originated from the financial sector. The agreement stipulates that all major financial institutions are subject to an "appropriate degree of regulation and oversight," and urged stricter disclosure regulations for hedge funds and their business activities.

Korea is said to have elevated its status as the chair country of the next G20 meeting, as it included in the agreement its proposal to fight "all forms of protectionism" and Korea’s experience in disposing of bad assets.

pisong@donga.com