London Summit – Leaders’ Statement

2 April 2009

1. We, the Leaders of the Group of Twenty, met in London on 2 April 2009.2. We face the greatest challenge to the world economy in modern times; a crisiswhich has deepened since we last met, which affects the lives of women, men,and children in every country, and which all countries must join together toresolve. A global crisis requires a global solution.3. We start from the belief that prosperity is indivisible; that growth, to be sustained,has to be shared; and that our global plan for recovery must have at its heart theneeds and jobs of hard-working families, not just in developed countries but inemerging markets and the poorest countries of the world too; and must reflect theinterests, not just of today’s population, but of future generations too. We believethat the only sure foundation for sustainable globalisation and rising prosperityfor all is an open world economy based on market principles, effective regulation,and strong global institutions.4. We have today therefore pledged to do whatever is necessary to:restore confidence, growth, and jobs;repair the financial system to restore lending;strengthen financial regulation to rebuild trust;fund and reform our international financial institutions to overcome thiscrisis and prevent future ones;promote global trade and investment and reject protectionism, to underpinprosperity; andbuild an inclusive, green, and sustainable recovery.

By acting together to fulfil these pledges we will bring the world economy out ofrecession and prevent a crisis like this from recurring in the future.5. The agreements we have reached today, to treble resources available to the IMFto $750 billion, to support a new SDR allocation of $250 billion, to support atleast $100 billion of additional lending by the MDBs, to ensure $250 billion ofsupport for trade finance, and to use the additional resources from agreed IMFgold sales for concessional finance for the poorest countries, constitute anadditional $1.1 trillion programme of support to restore credit, growth and jobs inthe world economy. Together with the measures we have each taken nationally,this constitutes a global plan for recovery on an unprecedented scale.

Restoring growth and jobs

6. We are undertaking an unprecedented and concerted fiscal expansion, which willsave or create millions of jobs which would otherwise have been destroyed, andthat will, by the end of next year, amount to $5 trillion, raise output by 4 per cent,and accelerate the transition to a green economy. We are committed to deliverthe scale of sustained fiscal effort necessary to restore growth.7. Our central banks have also taken exceptional action. Interest rates have been cutaggressively in most countries, and our central banks have pledged to maintainexpansionary policies for as long as needed and to use the full range of monetarypolicy instruments, including unconventional instruments, consistent with pricestability.8. Our actions to restore growth cannot be effective until we restore domesticlending and international capital flows. We have provided significant andcomprehensive support to our banking systems to provide liquidity, recapitalisefinancial institutions, and address decisively the problem of impaired assets. Weare committed to take all necessary actions to restore the normal flow of creditthrough the financial system and ensure the soundness of systemically importantinstitutions, implementing our policies in line with the agreed G20 framework forrestoring lending and repairing the financial sector.9. Taken together, these actions will constitute the largest fiscal and monetarystimulus and the most comprehensive support programme for the financial sectorin modern times. Acting together strengthens the impact and the exceptionalpolicy actions announced so far must be implemented without delay. Today, wehave further agreed over $1 trillion of additional resources for the world economythrough our international financial institutions and trade finance.10. Last month the IMF estimated that world growth in real terms would resume andrise to over 2 percent by the end of 2010. We are confident that the actions wehave agreed today, and our unshakeable commitment to work together to restoregrowth and jobs, while preserving long-term fiscal sustainability, will acceleratethe return to trend growth. We commit today to taking whatever action isnecessary to secure that outcome, and we call on the IMF to assess regularly theactions taken and the global actions required.11. We are resolved to ensure long-term fiscal sustainability and price stability andwill put in place credible exit strategies from the measures that need to be takennow to support the financial sector and restore global demand. We are convincedthat by implementing our agreed policies we will limit the longer-term costs to

our economies, thereby reducing the scale of the fiscal consolidation necessaryover the longer term.12. We will conduct all our economic policies cooperatively and responsibly withregard to the impact on other countries and will refrain from competitivedevaluation of our currencies and promote a stable and well-functioninginternational monetary system. We will support, now and in the future, to candid,even-handed, and independent IMF surveillance of our economies and financialsectors, of the impact of our policies on others, and of risks facing the globaleconomy.

Strengthening financial supervision and regulation

13. Major failures in the financial sector and in financial regulation and supervisionwere fundamental causes of the crisis. Confidence will not be restored until werebuild trust in our financial system. We will take action to build a stronger, moreglobally consistent, supervisory and regulatory framework for the future financialsector, which will support sustainable global growth and serve the needs ofbusiness and citizens.14. We each agree to ensure our domestic regulatory systems are strong. But we alsoagree to establish the much greater consistency and systematic cooperationbetween countries, and the framework of internationally agreed high standards,that a global financial system requires. Strengthened regulation and supervisionmust promote propriety, integrity and transparency; guard against risk across thefinancial system; dampen rather than amplify the financial and economic cycle;reduce reliance on inappropriately risky sources of financing; and discourageexcessive risk-taking. Regulators and supervisors must protect consumers andinvestors, support market discipline, avoid adverse impacts on other countries,reduce the scope for regulatory arbitrage, support competition and dynamism, andkeep pace with innovation in the marketplace.15. To this end we are implementing the Action Plan agreed at our last meeting, as setout in the attached progress report. We have today also issued a Declaration,Strengthening the Financial System.In particular we agree:

to reshape our regulatory systems so that our authorities are able toidentify and take account of macro-prudential risks;to extend regulation and oversight to all systemically important financialinstitutions, instruments and markets. This will include, for the first time,systemically important hedge funds;to endorse and implement the FSF’s tough new principles on pay andcompensation and to support sustainable compensation schemes and thecorporate social responsibility of all firms;to take action, once recovery is assured, to improve the quality, quantity,and international consistency of capital in the banking system. In future,regulation must prevent excessive leverage and require buffers ofresources to be built up in good times;to take action against non-cooperative jurisdictions, including tax havens.We stand ready to deploy sanctions to protect our public finances andfinancial systems. The era of banking secrecy is over. We note that theOECD has today published a list of countries assessed by the GlobalForum against the international standard for exchange of tax information;to call on the accounting standard setters to work urgently with supervisorsand regulators to improve standards on valuation and provisioning andachieve a single set of high-quality global accounting standards; andto extend regulatory oversight and registration to Credit Rating Agenciesto ensure they meet the international code of good practice, particularly toprevent unacceptable conflicts of interest.

16. We instruct our Finance Ministers to complete the implementation of thesedecisions in line with the timetable set out in the Action Plan. We have asked theFSB and the IMF to monitor progress, working with the Financial ActionTaskforce and other relevant bodies, and to provide a report to the next meetingof our Finance Ministers in Scotland in November.

Strengthening our global financial institutions

17. Emerging markets and developing countries, which have been the engine ofrecent world growth, are also now facing challenges which are adding to thecurrent downturn in the global economy. It is imperative for global confidenceand economic recovery that capital continues to flow to them. This will require asubstantial strengthening of the international financial institutions, particularly the

IMF. We have therefore agreed today to make available an additional $850 billionof resources through the global financial institutions to support growth inemerging market and developing countries by helping to finance counter-cyclicalspending, bank recapitalisation, infrastructure, trade finance, balance of paymentssupport, debt rollover, and social support. To this end:we have agreed to increase the resources available to the IMF throughimmediate financing from members of $250 billion, subsequentlyincorporated into an expanded and more flexible New Arrangements toBorrow, increased by up to $500 billion, and to consider marketborrowing if necessary; andwe support a substantial increase in lending of at least $100 billion bythe Multilateral Development Banks (MDBs), including to low incomecountries, and ensure that all MDBs, including have the appropriatecapital.

18. It is essential that these resources can be used effectively and flexibly to supportgrowth. We welcome in this respect the progress made by the IMF with its newFlexible Credit Line (FCL) and its reformed lending and conditionalityframework which will enable the IMF to ensure that its facilities addresseffectively the underlying causes of countries’ balance of payments financingneeds, particularly the withdrawal of external capital flows to the banking andcorporate sectors. We support Mexico’s decision to seek an FCL arrangement.19. We have agreed to support a general SDR allocation which will inject $250billion into the world economy and increase global liquidity, and urgentratification of the Fourth Amendment.20. In order for our financial institutions to help manage the crisis and prevent futurecrises we must strengthen their longer term relevance, effectiveness andlegitimacy. So alongside the significant increase in resources agreed today we aredetermined to reform and modernise the international financial institutions toensure they can assist members and shareholders effectively in the newchallenges they face. We will reform their mandates, scope and governance toreflect changes in the world economy and the new challenges of globalisation,and that emerging and developing economies, including the poorest, must havegreater voice and representation. This must be accompanied by action to increasethe credibility and accountability of the institutions through better strategicoversight and decision making. To this end:

we commit to implementing the package of IMF quota and voice reformsagreed in April 2008 and call on the IMF to complete the next review ofquotas by January 2011;we agree that, alongside this, consideration should be given to greaterinvolvement of the Fund’s Governors in providing strategic direction tothe IMF and increasing its accountability;we commit to implementing the World Bank reforms agreed in October2008. We look forward to further recommendations, at the nextmeetings, on voice and representation reforms on an acceleratedtimescale, to be agreed by the 2010 Spring Meetings;we agree that the heads and senior leadership of the internationalfinancial institutions should be appointed through an open, transparent,and merit-based selection process; andbuilding on the current reviews of the IMF and World Bank we asked theChairman, working with the G20 Finance Ministers, to consult widely inan inclusive process and report back to the next meeting with proposalsfor further reforms to improve the responsiveness and adaptability of theIFIs.

21. In addition to reforming our international financial institutions for the newchallenges of globalisation we agreed on the desirability of a new globalconsensus on the key values and principles that will promote sustainableeconomic activity. We support discussion on such a charter for sustainableeconomic activity with a view to further discussion at our next meeting. We takenote of the work started in other fora in this regard and look forward to furtherdiscussion of this charter for sustainable economic activity.

Resisting protectionism and promoting global trade and investment

22. World trade growth has underpinned rising prosperity for half a century. But it isnow falling for the first time in 25 years. Falling demand is exacerbated bygrowing protectionist pressures and a withdrawal of trade credit. Reinvigoratingworld trade and investment is essential for restoring global growth. We will notrepeat the historic mistakes of protectionism of previous eras. To this end:

we will minimise any negative impact on trade and investment of ourdomestic policy actions including fiscal policy and action in support of thefinancial sector. We will not retreat into financial protectionism,particularly measures that constrain worldwide capital flows, especially todeveloping countries;we will notify promptly the WTO of any such measures and we call on theWTO, together with other international bodies, within their respectivemandates, to monitor and report publicly on our adherence to theseundertakings on a quarterly basis;we will take, at the same time, whatever steps we can to promote andfacilitate trade and investment; andwe will ensure availability of at least $250 billion over the next two yearsto support trade finance through our export credit and investment agenciesand through the MDBs. We also ask our regulators to make use ofavailable flexibility in capital requirements for trade finance.

23. We remain committed to reaching an ambitious and balanced conclusion to theDoha Development Round, which is urgently needed. This could boost the globaleconomy by at least $150 billion per annum. To achieve this we are committed tobuilding on the progress already made, including with regard to modalities.24. We will give renewed focus and political attention to this critical issue in thecoming period and will use our continuing work and all international meetingsthat are relevant to drive progress.

Ensuring a fair and sustainable recovery for all

25. We are determined not only to restore growth but to lay the foundation for a fairand sustainable world economy. We recognise that the current crisis has adisproportionate impact on the vulnerable in the poorest countries and recogniseour collective responsibility to mitigate the social impact of the crisis to minimiselong-lasting damage to global potential. To this end:

the actions and decisions we have taken today will provide $50 billion tosupport social protection, boost trade and safeguard development in lowincome countries, as part of the significant increase in crisis support forthese and other developing countries and emerging markets;we are making available resources for social protection for the poorestcountries, including through investing in long-term food security andthrough voluntary bilateral contributions to the World Bank’sVulnerability Framework, including the Infrastructure Crisis Facility, andthe Rapid Social Response Fund;we have committed, consistent with the new income model, that additionalresources from agreed sales of IMF gold will be used, together withsurplus income, to provide $6 billion additional concessional and flexiblefinance for the poorest countries over the next 2 to 3 years. We call on theIMF to come forward with concrete proposals at the Spring Meetings;we have agreed to review the flexibility of the Debt SustainabilityFramework and call on the IMF and World Bank to report to the IMFCand Development Committee at the Annual Meetings; andwe call on the UN, working with other global institutions, to establish aneffective mechanism to monitor the impact of the crisis on the poorest andmost vulnerable.

26. We recognise the human dimension to the crisis. We commit to support thoseaffected by the crisis by creating employment opportunities and through incomesupport measures. We will build a fair and family-friendly labour market forboth women and men. We therefore welcome the reports of the London JobsConference and the Rome Social Summit and the key principles they proposed.We will support employment by stimulating growth, investing in education andtraining, and through active labour market policies, focusing on the mostvulnerable. We call upon the ILO, working with other relevant organisations, toassess the actions taken and those required for the future.27. We agreed to make the best possible use of investment funded by fiscal stimulusprogrammes towards the goal of building a resilient, sustainable, and greenrecovery. We will make the transition towards clean, innovative, resourceefficient, low carbon technologies and infrastructure. We encourage the MDBs tocontribute fully to the achievement of this objective. We will identify and worktogether on further measures to build sustainable economies.