LOC19:55
16:55 GMT
WASHINGTON, Nov 1 (KUNA) -- President Barack Obama has outlined a
cooperative framework for the G-20 summit in Seoul this month that aims to
build on groundwork laid previously in order to reduce countries' external
imbalances, facilitate exchange-rate adjustments and establish an assessment
mechanism at the International Monetary Fund (IMF), a US official said on
Monday.
During a White House briefing that previewed the G-20 agenda scheduled for
Nov. 11 and 12 in South Korea, Lael Brainard, US undersecretary for
international affairs at the Treasury Department, and other officials noted
that the G-20 is now considered the premier forum for international economic
cooperation, and includes the largest emerging and developed-country economies.
"The risk is increasingly clear that uncoordinated and unilateral actions
could undermine the strong, sustained and balanced growth that we all need in
the G-20," Brainard said.
US officials at the gathering will seek leaders' endorsement of the
framework laid out by finance ministers on limiting excessive imbalances,
Brainard said.
"At its core is a very important commitment that surplus countries no less
than deficit countries will reduce external imbalances to sustainable levels,"
he said. "This is critical to ensure that as the US and other deficit
countries seek a more balanced growth path, other countries use all the tools
at their disposal to boost domestic demand so there are multiple engines of
growth, greater export opportunities and stronger job growth."
As the United States acts to address fiscal imbalances by repairing its
balance sheets, boosting its national savings and investing in US
competitiveness to achieve Obama's export goals, "other nations that have
relied excessively on exports must act to boost their domestic demand, or we
will all risk lower overall growth," Brainard said.
"Second, we are going to look for more progress on the part of key emerging
market economies in moving to market-determined exchange rates based on
economic fundamentals," he said. "When large economies with undervalued
exchange rates act to keep their currencies from appreciating, it imposes an
unfair burden of adjustment on other countries that are running more flexible
exchange rate regimes."
Solving this problem requires a cooperative approach, because emerging
economies individually will be less likely to move unless they are assured
that their neighbors will do the same, he added.
Third, the IMF must play a greater role in ensuring countries "meet these
stated commitments," Brainard said.
"It is very much in America's interest to reform the IMF's governance, to
make it more effective by making it more reflective of 21st century realities,
with emerging market economies taking on more responsibility in line with
their growing weight," he said.
In Seoul, the G-20 and the Financial Stability Board (FSB) will set out a
road map to ensure that FSB and G-20 members provide the appropriate
incentives and implement the requisite tools to ensure no financial
institution is too big to fail, Brainard said.
"The G-20 as a whole will need to make progress on three fronts: ensuring
the largest, most complex firms have enhanced capacity to absorb losses and
are subject to enhanced supervision; implementing strong national resolution
regimes that ensure taxpayers do not bear the burden; and building
international cooperative frameworks to ensure that national resolution
authorities work together to liquidate cross-border firms in an orderly manner,
" he said.
Obama and the other G-20 leaders agreed during their meeting in Pittsburgh
to phase out fossil-fuel subsidies, Brainard noted.
"This is part of our collective effort to encourage energy conservation,
improve energy security, reduce budgetary burdens and, of course, start
delivering on our commitments to reduce greenhouse-gas emissions," he said.
(end)
rm.bs
KUNA 011955 Nov 10NNNN