G20 summits/Addendum

Actions agreed at the first summit

(this is an abbreviated version, taken from the text of the communique of the summit)

By accounting standards bodies

Immediate actions by March 31, 2009

• enhance guidance for valuation of securities,
• address weaknesses in accounting and disclosure standards for off-balance sheet vehicles,
• improve disclosure of complex financial instruments by firms to market participants.

Medium-term actions

• work intensively toward the objective of creating a single high-quality global standard,
• ensure transparency, accountability, and maintain an appropriate relationship with the relevant authorities,
• work with others to ensure consistent application and enforcement of high-quality accounting standards,
• provide enhanced risk disclosures and ongoing disclosure of all losses, and ensure that financial statements include a complete, accurate, and timely picture of the firm's activities.

On regulatory regimes

Immediate actions by March 31, 2009

• the International Monetary Fund, the Financial Stability Forum and others to develop recommendations to mitigate pro-cyclicality.

Medium-term actions

• countries to review and report on their regulatory systems, and to undertake a Financial Sector Assessment Program (FSAP) reports,
• the appropriate bodies to review the regulation of the banking, securities, and insurance sectors and recommend improvements,
• national and regional authorities to review bankruptcy laws to ensure that they permit an orderly wind-down of large complex cross-border financial institutions,
• definitions of capital to be harmonized to achieve consistent measures of capital and capital adequacy.

On prudential oversight

Immediate actions by March 31, 2009

• regulators to ensure that credit rating agencies meet the highest standards and avoid conflicts of interest, and to review their mechanisms for monitoring compliance,
• authorities to ensure that financial institutions maintain adequate capital in amounts necessary to sustain confidence,
• supervisors and regulators to speed efforts to reduce the systemic risks of CDS and over-the-counter (OTC) derivatives transactions, to insist that market participants support trading platforms for CDS contracts, to expand OTC derivatives market transparency, and to ensure that the infrastructure for OTC derivatives can support growing volumes.

Medium-term actions

• credit rating agencies to be registered,
• central banks to develop the liquidity supervision of, and operations for, cross-border banks.

On risk management

Immediate actions by March 31, 2009

• regulators to develop guidance to strengthen banks' risk management practices,
• regulators to ensure that financial firms improve their management of liquidity risk,
• the Basel Committee to help the development of new stress testing models,
• financial institutions to create incentives to promote stability, and avoid rewarding risk taking,
• banks to exercise effective risk management and due diligence over structured products and securitization.

Medium-term actions

• international standard setting bodies to ensure that regulatory policy makers can respond rapidly to changes in financial markets and products,
• authorities to monitor changes in asset prices and their implications for the economic and financial systems.

On the integrity of the financial markets

Immediate actions by March 31, 2009

• national and regional authorities to enhance regulatory cooperation,
• - and to promote information sharing about domestic and cross-border threats to market stability, and ensure that legal provisions are adequate to address these threats,
• - and to review business conduct rules to protect markets and investors, to strengthen their cross-border cooperation to protect the international financial system from manipulation and fraud, and where necessary,to impose sanctions regime.

Medium-term actions

• national and regional authorities to protect the global financial system from uncooperative and non-transparent jurisdictions that pose risks of illicit financial activity,
• the Financial Action Task Force to continue to guard against money laundering and terrorist financing,
• tax authorities to promote tax information exchange.

On international cooperation

Immediate actions by March 31, 2009

• the establishment of supervisory colleges for all major cross-border financial institutions,
• the strengthening of cross-border crisis management arrangements.

Medium-term actions

• the collection of information on areas where convergence in regulatory practices is in need of accelerated progress, or where there may be potential for progress,
• action to ensure that temporary measures to restore stability and confidence have minimal distortions and are unwound in a timely, well-sequenced and coordinated manner.

On international financial institutions

Immediate actions by March 31, 2009

• the Financial Stability Forum to increases its membership of emerging economies,
• the International Monetary Fund and the expanded Financial Stability Forum to strengthen their collaboration and conduct early warning exercises,
• the International Monetary Fund to take a leading role in drawing lessons from the current crisis,
• a review of the adequacy of the resources of the IMF, the World Bank Group and other multilateral development banks,
• an exploration of ways to restore emerging and developing countries' access to credit and to resume private capital flows including ongoing infrastructure investment,
• where severe market disruptions have limited access to the necessary financing for counter-cyclical fiscal policies, multilateral development banks to ensure arrangements are in place to support those countries with a good track record and sound policies.

Medium-term actions

• to reform the Bretton Woods Institutions so that they can more adequately reflect changing economic weights in the world economy and be more responsive to future challenges, and give emerging and developing economies more representation,
• the International Monetary Fund to conduct surveillance reviews of all countries, giving greater attention to their financial sectors,
• the advanced economies to provide capacity-building programs for emerging market economies and developing countries on the formulation and the implementation of new major regulations.

(for an account of progress in taking the above actions see the April 2009 progress report)

Actions agreed at the second summit

(Summary of main points of Leaders' Statement )

Agreement was reached to

• treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy.
• establish a new Financial Stability Board (FSB) with a strengthened mandate, as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain, and the European Commission;
• regulate all systemically important financial institutions, instruments and markets, including hedge funds;
• improve the quality, quantity, and international consistency of capital in the banking system, and prevent excessive leverage;
• take action against non-cooperative jurisdictions, including tax havens;
• call on the accounting standard setters to create a single set of global standards;
• make credit rating agencies meet the international code of good practice.