Obama to G-20: Keep the recovery going
Written on June 22, 2010
President Obama has called for greater market transparency and oversight to help propel the global economic recovery in a letter to leaders of the Group of 20 Nations ahead of their June 26 summit in Toronto.
"Our highest priority in Toronto must be to safeguard and strengthen the recovery," wrote Obama, in his G-20 letter released by the White House on Friday. "We worked exceptionally hard to restore growth; we cannot let it falter or lose strength now. This means that we should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong.
Obama provided a list of suggested policy changes, including the implementation of more stringent capital and liquidity requirements as well as stronger oversight of derivatives markets and "more transparency and disclosure to promote market integrity and reduce market manipulation."
In addition, the president said the G-20 needs a "more effective framework for winding down large global firms."
The president pointed out that both houses of U.S. Congress have passed financial reform legislation. They are currently working on reconciling the bills in a move toward final approval.
He also highlighted one of his greatest macroeconomic concerns: the "continued heavy reliance on exports by some countries with already large external surpluses."
Obama also warned that all G-20 nations - including the United States - need to control their national debt. But he added that nations must balance fiscal responsibility with the concern that withdrawing economic stimulus too soon could jeopardize economic recovery.
"We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession," Obama wrote.
The G-20, an international group of finance ministers and central bank governors, was established in 1999 after the 1997 Asian financial crisis. The group aims to stabilize the global markets by uniting international economies.
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