the Chairman of the Group of Ten
International Conference on Financing for Development
18 March 2002,
The G-10 is the oldest forum for co-operation among finance ministries and central banks. It was established over forty years ago in response to a serious threat to the international monetary system. Historically, notably in the context of its General Borrowing Agreements, the G-10 has played -in close co-operation with the IMF- an active role in the management of financial crises. All this led to a process of regular meetings among economic policy makers who discuss a broad range of topical international economic as well as financial issues.
The thrust and confidence generated by these activities and meetings enable the G-10 to serve as a forum for major new ideas. The removal of gold from the international monetary system and the development of a strategy for creating global coherence in national financial regulation are just two of many examples.
Another strength of the G-10 is the capacity to engage in in-depth analysis of international economic policy issues. By drawing on the analytical capacities of central banks, finance ministries and the major international financial institutions, the G-10 is able to investigate a range of important policy issues and develop consensus on policy options.
In the years since the G-10 was established, a number of new international groupings have come into existence. This includes groupings like the G-7 and G-20 and regional and specialist fora like the Financial Stability Forum. The one thing that these groupings have in common with the G-10 is a shared desire to improve the international economic system. The specific G-10 contribution in this respect is due to two factors: firstly, as already mentioned, its active role in the financial management of liquidity crises and, secondly, the very broad and deep expertise of its financial markets and institutions.
What I would like to do today is to lay out a strategy for dealing with this challenge. I recognize that wholesale reform is not possible at a stroke. There are far too many vested interests. But a series of concrete steps that involve even closer co-operation among the international financial institutions will help improve international economic co-operation. We need to develop complementary -and not overlapping- agendas and to undertake joint work even more then we have in the past.
As Chairman of the G-10 I intend to contribute to such a process, and to invite others to participate in our activities. Over the course of the year we will be looking at how to improve the resolution of international financial crises and how to increase the robustness of the international financial system. By doing this jointly with others, the analysis will be more relevant, the work will be more efficient and the conclusions will have greater legitimacy.
If the action that I am announcing today is successful it could presage further steps that will make the process of international co-operation smoother, simpler and more efficient.
The G-10, as a grouping of creditors with a good experience in the financial management of institutions and markets but also of liquidity crises, must, in close collaboration with other fora (G-7, G-20, FSF…), go further.
In conclusion and in line with the so-called “Monterrey consensus” we must make new efforts to communicate with the developing countries and to organize new consultation mechanisms on regional level.
Personally, I hope that this conference will give new perspective for the implementation of new and common standards in financial management, specially during crises. I also hope that this meeting will lead to an increase of official development aid and an encouragement of the full implementation of the debt relief mechanisms.
Statements at the Conference