The finance ministers of the world's largest developed and emerging economies have pledged to continue programmes designed to stimulate economic activity, and reaffirmed their commitment to strengthen the financial system to prevent future crises and support sustainable growth.
They also declared strong support for a single set of global accounting standards at their two-day meeting in London that started on Sept. 5.
While the G-20 countries will continue their stimulus plans, they also agreed on the need for a "transparent and credible process" for the withdrawal of those measures as recovery becomes definite.
In their communique, the finance ministers say that they will work with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) on "cooperative and coordinated exit strategies," and notes that the scale, timing and sequencing of actions will vary across countries and across the types of policy measures.
"Financial markets are stabilising and the global economy is improving, but we remain cautious about the outlook for growth and jobs, and are particularly concerned about the impact on many low income countries," say the finance ministers.
The G-20 nations say that for growth to happen, it is important that countries act to support lending, including dealing with impaired assets and conducting robust stress tests where necessary. The ministers say that they will promote employment through structural policies, active labour market policies, and training and education.
To address the excessive commodity price volatility, the G-20 nations have committed to improve the functioning and transparency of physical and financial markets and promote a closer dialogue between producer and consumer countries.
In their report on the actions of the London summit, the G-20 finance ministers state that they have agreed to impose sanctions on tax havens effective March 2010. Jurisdictions that don't meet the international standards for sharing tax information may be deprived of funds from international financial institutions, such as the International Monetary Fund and the World Bank, as well as aid from G-20 countries.
The officials also state that, once recovery is assured, more should be done to increase and enhance the capital buffers of banks. They add that the Basel Committee on Banking Supervision would adopt measures that would improve the quality, consistency and transparency of bank capital.
Meanwhile, in the accounting arena, the G-20 nations also urged accounting standard setters to reduce the complexity of accounting standards for financial instruments by the end of the year.
The finance ministers declared their support for convergence towards a single set of high-quality, global, independent accounting standards on financial instruments, loan-loss provisioning, off-balance sheet exposures and the impairment and valuation of financial assets.
Within the framework of the independent accounting standard setting process, the International Accounting Standards Board is encouraged to take account of the Basel Committee guiding principles on IAS 39 and the report of the Financial Crisis Advisory Group; and its constitutional review should improve the involvement of stakeholders, including prudential regulators and the emerging markets.
The finance ministers' meeting was held to prepare for the G-20 summit of leaders in the U.S. at the end of September.