G20 meeting ends with more money committed to global stability fund

MEXICO CITY - Finance ministers and central bankers of the Group of Twenty (G20) members ended their meeting Monday with a commitment to strengthen financial regulations and increase financial commitment to a global stability fund.

Managing Director of the International Monetary Fund (IMF) Christine Lagarde said G20 members had committed more money to the global stability fund run by the IMF.

"In Tokyo we signed agreement to deliver nearly $290 billion to the fund," Lagarde told a press conference on the sidelines of the G20 meeting.

"Around $100 billion dollars more is due within the next weeks. We are now north of 80 percent of committed increase to IMF funds," said Lagarde.

The fund was created at the Los Cabos G20 meeting with pledges totaling $461 billion. Largarde said that the IMF now has access to $1 trillion to make loans for fighting economic disasters.

The statement also addressed concerns about the "fiscal cliff" in the US - a package of spending cuts and tax increases set to become effective next January if the US legislators fail to reach an agreement on how to reduce debt in the medium term.

"The United States will carefully calibrate the pace of fiscal tightening to ensure that public finances are placed on a sustainable long-run path while avoiding a sharp fiscal contraction in 2013," said the meeting's closing statement.

The statement said that members were happy with the results seen in Europe, which has launched a series of economic reforms to stabilize and better supervise its banking system in the face of debt crises in Portugal, Ireland, Italy, Greece and Spain.

However, Australian Finance Minister Wayne Swan said the G20 must make good on its commitments in order to fight the world's multiple economic crises.

"There is nothing more important to the global economy than to lift growth in the world's major advanced economies," Swan told a press conference on the sidelines of the G20 meeting.

Separately, Mexico used the occasion to release a disaster preparedness manual, a favored initiative of the current government, which compiles the best practices of 16 nations facing natural disasters.

The document is designed to help finance ministers and other authorities develop financial strategies for disaster risk management.

The meeting also stressed improving banking transparency and consistently implementing regulation in international financial systems, an issue that has been on the table since 2008.

Bank of Canada Governor Mark Carney told a press conference here that regulators had moved forward on the so-called "too-big-to-fail" institutions whose central place in the economy creates system risks when things go wrong.

"We are identifying globally systematically important banks, for which there will be additional capital requirements," Carney said. The next initiatives will be to identify institutions that play a similar role within each nation and within insurance markets as well.

The G20 conference was the last major event chaired by Mexico before it hands over the rotating G20 presidency to Russia for 2013.