By Kang Seung-woo
Staff reporter
Busan ― Finance ministers of G-20 nations Saturday agreed to intensify their efforts to realize "strong, sustainable and balanced" growth.
In the communique issued at the end of the confab that also included G-20 central bankers, it was observed that the global economy is making faster-than-expected recovery, but the recent volatility in financial markets has shown that significant challenges are still remaining.
"The recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability, differentiated for and tailored to national circumstances,"it said.
The participants also agreed on the need to reform the International Monetary Fund (IMF).
The Busan meeting was aimed at laying the groundwork for a leaders' summit in June later this month in Toronto, Canada. It is also a precursor to their summit in Seoul in November.
"We agreed further progress on financial repair is critical to global economic recovery. This requires greater transparency and further strengthening of banks' balance sheets and better corporate governance of financial firms,"the participating nations said in the statement.
The meeting took place amid the European debt crisis, which is feared to deal the second blow to the global economy in three years.
The world's economically leading nations have called on the Basel Committee on Banking Supervision to propose internationally-agreed rules to improve the bank capital and discourage excessive leverage and risk-taking by the time of the G20 Seoul summit in November.
The ministers and central bank governors emphasized the need to reduce "moral hazard" linked to systemically important financial institutions and reinforce our commitment to develop effective resolution tools and frameworks.
They also agreed to accelerate the implementation of strong measures to improve transparency, regulation and supervision of hedge funds, credit rating agencies and compensation practices and OTC (over-the-counter) derivatives.
"We called on the Financial Stability Board to review national and regional implementation in these areas and promote global policy cohesion. We also committed to improve the functioning and transparency of commodities markets," the statement said.
In terms of financial safety nets, they acknowledged a need for national, regional and multilateral efforts to deal with capital volatility and prevent crisis contagion and agreed to explore policy options to improve global financial safety nets, based on sound incentives.
The ministers and central bank governors will gather in Gyeongju, Korea, in October in order to set the agenda for the G-20 summit in November.