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G20 Summit Agrees Some Broad Objectives but is Short on Detail

Date: 11 November 2010

Source: G20

It was reported yesterday in a communiqué by the G20 that many emerging countries are on the brink of introducing further restrictions on capital inflows in response to their concerns about financial stability and asset price bubbles. The final communiqué points to efforts to address global imbalances and avoid competitive devaluations and protectionism, but suggests the G20 will spend the next few months thinking about what sort of guidelines may be looked at to achieve these ends. In line with the findings of the G20 finance ministers a few weeks ago, they will seek to allow a more market determined level for exchange rates. The communiqué also mentions the commitment to sustainable growth. However,  references to regulation in the field of financial services was very light on detail: the need to back up the FSB/Basel process is of course reiterated with the focus on dealing with globally systemically important financial institutions as well as regulation of shadow banking, underpinning market integrity and consumer protection.