The summit of the main countries and institutions concerned by the financial crisis, held in Washington on November, 15th 2008, brought together the Heads of State and Government of the G20, the Secretary General of the United Nations, the Director General of the IMF, the President of the World Bank, the President of the European Commission and the President of the Financial Stability Forum. They jointly adopted a common declaration aiming to strengthen cooperation between the countries in order to tackle this crises situation.

The Leaders of the Group of Twenty, held an initial meeting in Washington on November 15th, 2008, amid serious challenges to the world economy and financial markets, with the objective to enhance their cooperation and work together to restore global growth and achieve the needed reforms in the world's financial systems.

Prior to this meeting, EU Heads of State and Government met in Paris on November, 7th, in an informal preparatory meeting where they agree on the need for an EU common voice in Washington Summit. In this preparatory meeting, the European Union drafted a European strategy based on the principles of accountability and transparency, and the establishment of procedures to assess risks and prevent crises.

The leaders meeting in Washington, recognized that all the reforms agreed in such meeting will only be successful if grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. These principles, as stated in the Declaration, are essential to economic growth and prosperity, have lifted millions out of poverty, and have significantly raised the global standard of living. Recognizing the necessity to improve financial sector regulation, over-regulation that would hamper economic growth and exacerbate the contraction of capital flows must be avoided.

A broader policy response is therefore needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. Somme immediate actions must be taken in order to achieve these objectives, as well as to address longer-term challenges:

• Continue the efforts and take whatever further actions are necessary to stabilize the financial system.
• Recognize the importance of monetary policy support, as deemed appropriate to domestic conditions.
• Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.
• Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and program support. The G20 stress the International Monetary Fund's (IMF) important role in crisis response, welcome its new short-term liquidity facility, and urge the ongoing review of its instruments and facilities to ensure flexibility.
• Encourage the World Bank and other multilateral development banks (MDBs) to use their full capacity in support of their development agenda, and welcome the recent introduction of new facilities by the World Bank in the areas of infrastructure and trade finance.
• Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.

In addition to these actions, more reforms will be implemented to strengthen financial markets and regulatory regimes so as to avoid future crises. Heads of State and Government present in Washington agreed that regulation is first and foremost the responsibility of national regulators who constitute the first line of defence against market instability. However, financial markets are global in scope, and therefore, intensified international cooperation among regulators and strengthening of international standards, where necessary, and their consistent implementation is necessary to protect against adverse cross-border, regional and global developments affecting international financial stability.

Regulators must ensure that their actions support market discipline, avoid potentially adverse impacts on other countries, including regulatory arbitrage, and support competition, dynamism and innovation in the marketplace. Financial institutions must also bear their responsibility for the turmoil and should do their part to overcome it.

Common Principles for Reform of Financial Markets

• Strengthening Transparency and Accountability
• Enhancing Sound Regulation
• Promoting Integrity in Financial Markets
• Reinforcing International Cooperation
• Reforming International Financial Institutions

The Declaration reflects a clear commitment to take rapid action to implement these principles. An initial list of specific measures is set forth in an Action Plan, including high priority actions to be completed prior to March 31st, 2009.

The G-20 will meet again by April 30, 2009, to review the implementation of the principles and decisions for the financial systems reform agreed in Washington.