G-20 Seeks to Tackle Toxic Bank Assets, Defuse Policy Tension
March 13 (Bloomberg) -- Group of 20 finance ministers zeroed in on cleansing banks of toxic assets as they sought to set aside a transatlantic dispute on how best to fight the global recession.
“You are not going to have a substantial recovery in the real economies until we solve this bank issue,” Flaherty told reporters in Horsham. Lagarde, who this week stoked concerns that a rift was developing with the U.S., said in an interview that “it would be major” if the G-20 agreed how to aid banks.
A deepening slump and the banking turmoil are forcing officials to form a more united approach. The run-up to the meeting was marred by discord as European governments rebuffed a U.S. call to spend more money and demanded more focus be paid to tightening market regulation.
“We need urgent policy action,” Simon Johnson, a former chief economist at the International Monetary Fund and now a senior fellow at the Peterson Institute for International Economics, told Bloomberg Television. “The financial sector problems are far from over. We have a worsening real economy.”
The G-20 officials will dine tonight at a luxury countryside retreat and continue discussions tomorrow. The gathering comes three weeks before national leaders meet for their own summit in London.
G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.