The economy is in recovery and a sustainable economy is the best way to preserve that recovery. On June 5, G20 Finance Ministers and Central Bank Governors issued a “joint communiqué” which indicated that despite regional and national imbalances, the world economy is recovering faster than expected.
However, the recent sovereign debt crisis in Europe and international financial market volatility demonstrate that their are still serious challenges ahead.
Financial reform and sustainable finance are important, but we need to see balanced growth and a mechanism for shared medium-term goals.
We need specific policy actions by governments, the International Monetary Fund, and the World Bank. The government needs to take measures to improve hedge funds, credit rating companies, subsidies, financial derivatives and transparency. The banks also need to increase capital flow, and reduce the need for moral hazard.
We also need to see international accounting standards. Above all we need to see national, bilateral and multilateral efforts to deal with the capital markets to limit the spread of instability and crisis.
Ultimately it comes down to a sustainable framework for cooperation between member states.
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