H.E. Mr. Kevin Rudd, Prime Minister
25 September 2008
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KEVIN RUDD, Prime Minister of Australia, said there were many who criticized the United Nations, but those who argued against it advanced no credible arguments for what should replace it. “Whatever its imperfections, the United Nations represents a necessary democracy of States,” he said.
Recalling that the United Nations had been conceived as a bold experiment for protecting State sovereignty and advancing both the protection of peoples and dignity of individuals, he said the ideals on which the institution had been founded remained as valid today as in the past. The “quantum” of financial institutional failure seen in recent weeks had been significant, and that of Government intervention unprecedented.
On the global financial crisis, he noted that financial markets were a public good, and if Governments failed to protect that good, working people suffered. After the Asian financial crisis, the world resolved to reduce the risk of systemic shocks, but a decade on, those lessons had not been learned. The failure of internal governance within financial institutions was coupled with a failure of external oversight. The immediate task was to rebuild confidence by ensuring that central banks provided adequate liquidity.
In the longer term, he said, systemically important financial institutions should be licensed to operate only on condition of disclosure, and States must ensure that banks build up capital as a buffer for bad times. Financial institutions also needed internal incentives to promote responsible behaviour, and supervisory systems must be compatible with accounting procedures. IMF should be given a strengthened mandate for prudential analysis.
Implementing such reforms required political will, exercised through the Group of 20 (G-20) world’s largest economies, together with the European Union, among others, he said. In that context, Australia would work intensively with the chairs of the G-20 to ensure that financial stability was at the centre of the work programme. The G-20 finance ministers should review progress in adopting the financial stability forum recommendations, and demonstrate their commitment to best-practice financial regulation.
Taking up environmental issues, he said Australia had begun developing the world’s most comprehensive emissions trading and carbon pollution reduction scheme to cut carbon emissions. It would implement national strategies for energy efficiency and renewable energy. On security matters, he said Australia was working with Afghanistan to bring stability to that country, and continued to urge nations to sign and ratify the Comprehensive Nuclear Test Ban Treaty. His Government was concerned that States such as Iran and North Korea failed to comply with demands for a full accounting of their nuclear programmes.