G20 finance ministers say world economy better than expected

Group of 20 finance ministers meeting in South Korea are saying that the world economy is recovering faster than expected but warned of “significant challenges” ahead. After the two-day meeting to discuss the eurozone debt crisis, the ministers underlined the importance of sustainable public finances but made no mention of the controversial proposal for a bank levy. 

Reuters

In their communique, the ministers called for strong measures to improve the transparency, regulation and supervision of hedge funds, credit rating agencies, compensation practices and OTC (over the counter) derivatives.

The ministers said the financial sector should also make a "fair and substantial contribution" towards any future state rescue deals. 

"It is critical that our banking regulators develop capital and liquidity rules of sufficient rigour to allow our financial firms to withstand future downturns in the global financial system," they said.

They urged the Basel Committee on Banking Supervision to put forward rules to boost bank capital and discourage excessive leverage and risk-taking by the time the G20 holds its second summit of the year, in Seoul in November.

The global bank tax is supported by the International Monetary Fund, European powers and the United States.

It is resisted by some developing nations plus Canada and Australia, who argue that they should not have to pay to clear up a mess they did not create.