Finance leaders pledge to work to end recession

April 24, 2009 2:54:02 PM PDT
Finance officials from the world's top economic powers pledged on Friday to cooperate on efforts to lift nations out of the worst recession since the 1930s. The major goal: Get banks in every country to start lending again. "We are committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again," Treasury Secretary Timothy Geithner and his counterparts from world's top seven industrialized democracies said in a joint statement. "We will take whatever actions are necessary" to bring that about, they said.

Fixing financial institutions in the U.S. and worldwide and jump-starting lending must be done before the global economy can rebound.

With job losses soaring and financial damage growing, President Barack Obama and leaders of the Group of 20 nations adopted a sweeping strategy earlier this month. Now the details: The task at hand is for individual countries to carry through on their pledges and for financial officials to keep up the pressure on each other so that momentum is not lost.

"We are making progress," Geithner said after the meeting.

Finance officials promised to move swiftly to provide the necessary fiscal tonic - tax cuts or increased government spending - to turn around their own troubled economies. And, they pledged to act, as needed, to spur lending and shore up shaky banks by injecting them with capital to protect against further losses.

One area where the officials failed to immediately secure further agreements to financially fortify the International Monetary Fund.

Specifically, officials didn't win new financial commitments on Friday to raise $500 billion for an emergency lending facility at the IMF. That goal was set by G-20 leaders at their London summit on April 2.

Takehiko Nakao, a senior official with the Japanese finance ministry, said that discussions at the IMF on Friday didn't produce any new commitments on that front. Nakaol, however, said countries would meet again soon, with the hope of coming up with the needed money before the end of June.

Obama this week asked Congress to put up $100 billion. Europe and Japan have pledged equivalent amounts. But other major countries, including China, Russia and Saudi Arabia, have not come forward yet with their commitments.

But that could be hindered because China and other big developing countries like India want to link such financial support to making progress on their long-sought goal for a bigger voice in the operation of institutions like the IMF.

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