BONN, Germany -- The world's richest nations pledged Saturday to strengthen their early-warning system for financial crises like those that have rocked Asia, Russia and Brazil. But the United States rejected regulation of currency exchange rates requested by Germany and Japan.
The Group of Seven countries adopted long-awaited proposals by German central bank chief Hans Tietmeyer for ways to better coordinate surveillance of global finance, with the aim of detecting shocks before they hit home.
Germany failed to sway its partners, though, with its campaign for stronger measures to stabilize markets after the financial crises over the past two years, including a proposal to put limits on the exchange rates of three major currencies -- the dollar, yen and euro.
"My personal view remains unchanged," U.S. Treasury Secretary Robert Rubin said after the talks. "I think the way to achieve stability is through strong domestic economic policies."
German Finance Minister Oskar Lafontaine, who has spearheaded the campaign for more market regulation, conceded the G-7 remained "in dispute" on the issue.
In a final declaration, the finance ministers and central bankers pledged to "maintain strong cooperation to promote stability of the international monetary system."
Concern that global economic growth depends too much on the United States prompted a strong U.S. plea for Europe and Japan to boost their economies, although the officials said they didn't agree on how to do it.
"It is crucially important that Japan and Europe also move forward with domestic demand-led growth in their economies, to achieve more balanced growth among our countries," Rubin said.
With Germany and Britain campaigning for debt relief for poor countries, the officials agreed to work out proposals for their leaders to adopt in May at a summit of G-7 countries and Russia in Cologne, Germany. The G-7 nations include the United States, Japan, Germany, France, Britain, Italy and Canada.
But the crucial topic at the one-day meeting was how to overhaul the "global financial architecture" to prevent future Asian-style crises.
The G-7 nations approved a proposed "Financial Stability Forum" of about 35 officials from governments, international regulators and global financial institutions that would meet twice a year.
"Sweeping institutional changes are not needed to realize these improvements," Tietmeyer's report said.
The report suggested that the G-7 consider the need for increased regulation of the market, notably of highly speculative "hedge funds."
Some said the mood of crisis has already eased since last fall, when the G-7 commissioned Tietmeyer's report.
"Things are a lot better than when we met last October, when there was a lot of concern about spillover from the crisis regions," said Gordon Thiessen, governor of the Bank of Canada.
© 2016. All Rights Reserved. | Contact Us