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G20 finance ministers commit all firepower to combat crisis

FINANCE ministers of the Group of 20 nations yesterday promised the International Monetary Fund would help troubled countries and said they would use their full fiscal and monetary firepower to combat the worst economic crisis since the 1930s.

"We are committed to deliver the scale of sustained effort necessary to restore growth," the ministers said in a joint G20 statement which also said the IMF and multilateral development banks should be given the funds they need for rescue duties.

Separately, British Prime Minister Gordon Brown, who hosts a G20 summit on April 2, said "massive change" was about to take place in financial market regulation, notably supervision of hedge funds and other areas only lightly regulated.

The statement issued by the ministers after their talks said that hedge funds should be registered and disclose information needed to keep tabs on risk.

It said the top priority right now was to get lending, the lifeblood of the economy, flowing normally again.

The ministers essentially papered over differences as to the emphasis and urgency to be given to anti-recession spending by government on the one hand and regulation on the other.

The United States had yet to detail how it plans to clean up banks' toxic assets, which many say is essential to get the world moving again.

That shifted much of the focus of yesterday's meeting to renewed commitments to do all that was needed and to pledges that the International Monetary Fund, Asian Development Bank and other agencies would have enough cash to rescue countries in difficulty.

IMF resources should be increased fast and substantially, the Asian Development Bank should get a capital increase and multilateral development banks more generally should get the money they needed to do their job, said the statement.

"We need a commitment from countries that they will do whatever is necessary and for as long as necessary to support their economies," said Alistair Darling, Britain's finance minister, host to the talks at a luxury countryside hotel.

Perhaps mindful of the mass exodus of money that marked the Asian financial crisis of the 1990s, Darling added: "We really must take action to stop damage being done to the emerging economies, who are seeing money coming out of their systems."

The IMF has spent close to US$50 billion on bailing out countries in eastern Europe in recent months and is asking for its rescue funding to be doubled to US$500 billion, while the Asian Development Bank is also hoping for more ammunition.

The G20 accounts for over 80 percent of the world's output, or gross domestic product, which is expected to shrink in 2009 by more than any year since the 1930s after the financial crisis that erupted in the United States in 2007 engulfed confidence, activity, trade and jobs worldwide.

Officials speaking on condition of anonymity had suggested the meeting would gloss over differences about how much governments should spend to boost economies.


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