G20 London Finance Summit

In April 2009, representatives from the twenty largest economies in the world gathered in London for the G20 Summit to discuss world financial issues. The Summit was to be hosted by the United Kingdom and chaired by Prime Minister Gordon Brown. It was the first G20 Summit to be held in London and saw an unprecedented gathering of world leaders which included US President Barack Obama, Chinese President Hu Jintao, French President Nicolas Sarkozy, German Chancellor Angela Merkel among others. In addition to these leaders, representatives from the African Union, the International Monetary Fund and the World Bank also attended.

The main expectation from the Summit was to discuss global financial issues and share opinions of national leaders on various topics such as the development of financial regulation, the strengthening of global economic coordination, the need for investment in impoverished nations, the deprivation of investment opportunities which many developing countries lack.

Through the Summit, world leaders sought to agree on principles of economic and financial stability to be used on a global scale. These principles included the recognition of the need for new, coordinated and effective regulatory standards to be adopted across financial systems, a focus on increasing growth and corporate responsibility and to develop mechanisms to prevent future economic crises.

In addition to this, the Summit also sought to address global poverty and development. It was agreed that more needed to be done to offer financial support to the world’s poorest countries, to increase their ability to access more developed markets, to create jobs and to address climate change.

At the close of the Summit, the London Declaration was released. This document is a fourteen-point global financial policy framework that is to be implemented by the leaders of the G20 group of countries. This document is to be used to ensure better regulation, oversight and transparency in global financial markets and to work together to improve coordination of macroeconomic policy and promote sustainable and balanced global economic growth.

Part of this agreement focused on fiscal stimulus and the long-term prospects for economic growth. This included agreements to strengthen international coordination of macroeconomic and financial policies. Along with these agreements, the G20 leaders agreed to provide financial support to developing countries to aid in the reduction of poverty, promote human security and sustainable development.

The Summit was a success in that it allowed for large-scale global solutions to be discussed and agreed upon by a large group of world leaders. Going forward, implementation of the agreements from the London Declaration, as well as existing global agreements and policies, will be highly influential in the improvement of the global financial system. The measures proposed do have the potential to bring long-term economic stability to global markets and reduce the risk of recurrence of financial crises.

The G20 London Summit, held in April 2009, was convened in the wake of the global financial crisis to address and resolve the deepening recession. The G20 Leaders agreed on a comprehensive set of policy actions to restore financial stability and foster global economic growth.

The G20 countries together represented 85% of the worlds Gross National Product, 75% of world trade, and two-thirds of the world’s population. At the London Summit, leaders agreed to take coordinated, practical and effective policy actions at both the national and global level. These actions included targeting $500 billion in additional resources to the International Monetary Fund and other international organisations, and providing an extra $250 billion to mutual guarantees for trade financing.

In addition, the leaders agreed to expand financial safety nets for countries affected by the crisis, reform international financial institutions, and adjust policies or regulatory frameworks that may have contributed to the economic downturn.

The G20 London summit set out specific actions to increase transparency, strengthen the resolution of financial institutions and markets, promote sound regulation, establish a global framework for exchange rate stability, and seek to restore balance in the global economy.

Although the London Summit passed relatively quickly with little progress apparent, many experts consider the London Declaration a major accomplishment for international cooperation and for furthering the stability of the world economy. This sentiment was arguably affirmed when the summit released subsequent communiques following the summit and throughout the year that outlined a coordinated response to the continued financial and economic crisis that enabled countries to move forward in a more collective effort.