The Communique Released

The communiqué released by the finance ministers and central bank governors of the
Group of 20.
"We reaffirmed that our overriding objective is to improve the living standards of all our
citizens through strong economic and jobs growth. We expressed our solidarity with the
Japanese people after the tragic events, our readiness to provide any needed cooperation,
and our confidence in the resilience of the Japanese economy and financial sector.
The global recovery is broadening and becoming more self-sustained, with increasingly
robust private demand growth. But downside risks still remain. We agreed to remain
vigilant and to take the actions required to strengthen the recovery and reduce risks.
Events in some Middle-East-North African countries and in Japan have increased

economic uncertainty and tensions in energy prices. We noted there is adequate spare
capacity to meet global energy demand.
In order to enhance our mutual assessment process to promote external sustainability, we

agreed on a set of indicative guidelines (see attached) that complete the first step of our
work to address persistently large imbalances. We now launch the second step of this
process with an in-depth assessment of the nature of these imbalances and the root causes
of impediments to adjustment. Based on this analysis, the IMF assessment on progress
toward external sustainability, as well as the other aspects of our mutual assessment
process, we will ascertain for our next meeting the corrective and preventive measures that
will form the 2011 action plan to ensure Strong, Sustainable and Balanced Growth, to be
discussed by Leaders at the Cannes Summit.
To strengthen the international monetary system, we agreed to focus our work, in the short
term, on assessing developments in global liquidity, a country specific analysis regarding
drivers of reserve accumulation, a strengthened coordination to avoid disorderly
movements and persistent exchange rates misalignments, a criteria-based path to broaden
the composition of the SDR, an improved toolkit to strengthen the global financial safety
nets, enhanced cooperation between the IMF and regional financial arrangements, the
development of local capital markets and domestic currency borrowing, coherent
conclusions for the management of capital flows drawing on country experiences. We also
agreed on the need to strengthen further the effectiveness and coherence of bilateral and
multilateral IMF surveillance, particularly on financial sector coverage, fiscal, monetary
and exchange rate policies.
We welcome the entry into force and the activation of the expanded and more flexible New
Arrangements to Borrow (NAB). We will work to complete the steps required to
implement the 2010 quota and governance reform by the Annual Meetings of 2012.
Commodity prices face increasing pressures. We welcomed the recommendations of the

IEF, IEA and OPEC and committed to improve the timeliness, completeness and reliability
of the JODI Oil database. We welcomed the work of international organizations on their
report to address excessive price volatility in food and agricultural markets, and its impact
on food security. We look forward to receiving their final recommendations, including on
risk management and mitigation tools. We stressed the need for participants on commodity
derivatives markets to be subject to appropriate regulation and supervision, called for
enhanced transparency in both cash and derivatives markets as previously recommended
by IOSCO, and asked IOSCO to finalize, by September, its recommendations on regulation
and supervision in this area especially to address market abuses and manipulation, such as
through formalized position management powers including the authority to set ex-ante
position limits where appropriate, among other powers of interventions.
We welcomed the preliminary proposals of the FSB to strengthen its capacity, resources
and governance including representativeness and asked the FSB to put forward formal
proposals at its July meeting for review at our next meeting. We took stock of progress
made to determine a cohort of global SIFIs and confirmed that the FSB will make
recommendations on a multi-pronged framework with more intensive supervisory
oversight, effective resolution capacities and higher loss absorbency capacity. We look
forward to public consultations on SIFI recommendations and request a macroeconomic
impact study by FSB and BCBS, in cooperation with BIS and IMF, to be reviewed at our
next meeting. We welcomed the FSB work on the scope of shadow banking and look
forward to the recommendations that the FSB will prepare for our next meeting on the
regulation and oversight of the shadow banking system. We committed to set high,
internationally consistent, coordinated and non-discriminatory requirements in our
legislations and regulations implementing FSB recommendations on OTC derivatives
markets and stressed the need to avoid overlapping regulations. We urge all jurisdictions
to fully implement the FSB principles and standards on compensation. We call on the FSB
to undertake ongoing monitoring in this area and will assess the results of the 2nd peer
review on compensation practices by our next meeting. We will review at our next meeting
progress made by the IASB and FASB towards completing their convergence project by
the end of 2011 and look forward to the outcome of the ongoing IASB governance review
process. We welcomed ongoing work of OECD and FSB and other relevant international
organizations to develop common principles on consumer protection in financial services.
We agreed to maintain momentum for action to tackle non-cooperative jurisdictions and to

fully implement the G20 anti-corruption action plan. We asked the Global Forum to report
to us on ways to improve the effectiveness of exchange of tax information. We tasked the
World Bank, working with Regional Development Banks, and the IMF, in coordination
with other relevant organizations, to conduct the analysis on mobilizing sources of climate
change financing, including public and private bilateral and multilateral as well as
innovative sources, drawing inter alia on the AGF report consistent with the objective,
provisions and principles of the UN Framework Convention on Climate Change. We
support the work of the transitional committee established for the design of the Green
Climate Fund. We reemphasize the importance of implementing the Seoul Development
Consensus on Shared Growth and its Multi-year Action-Plan. We look forward to concrete
recommendations from the High level panel on infrastructure investment by September.
G20 Indicative Guidelines for Assessing Persistently Large Imbalances
1.Our aim is to promote external sustainability and ensure that G20 members pursue the
full range of policies required to reduce excessive imbalances and maintain current account
imbalances at sustainable levels.
2.In February we agreed on a set of indicators that will allow us to focus through an
integrated 2-step process on those persistently large imbalances that require policy action.
These indicators are (i) public debt and fiscal deficits; and private savings rate and private
debt (ii) and the external imbalance composed of the trade balance and net investment
income flows and transfers, whilst taking due consideration of exchange rate, fiscal,
monetary and other policies.
3.To complete the first step, we have agreed today on indicative guidelines against which
each of these indicators will be assessed. While not policy targets, these guidelines establish
reference values for each available indicator allowing for identification of countries for the
second step in-depth assessment. Four approaches will be used:
1 – A structural approach, which is based on economic models and grounded in economic

theory, which benchmarks G20 members against each indicator in a way that takes into
account specific circumstances including large commodity producers (e.g. its demographic
profile, oil balance or trend growth).
2 – A statistical approach which benchmarks G20 countries on the basis of their national
historical trends.
3 – A statistical approach which benchmarks G20 country's historical indicators against

groups of countries at similar stages in their development.
4 – A statistical approach which draws on data, benchmarking G20 country's indicators

against the full G20.
4.Statistical approaches are based on the 1990 to 2004 period, as this is the period that
preceded the large build up in external imbalances. Reference values drawn from 1990-
2010 were also provided as a complement. In all four approaches, forecast figures over the
2013-15 period are compared to the values suggested by the guidelines to determine
whether or not an in depth assessment should be undertaken. Those countries identified by
at least two of the four approaches as having persistently large imbalances will be assessed
in-depth to determine in a second step the nature and root causes of their imbalances and
to identify impediments to adjustment. In carrying out this assessment, we will take due
account of the exchange rate and monetary policy frameworks of members. For members
of the euro area with its governance framework, this assessment will involve the
appropriate authorities. National circumstances will also be taken into account. In the
second step assessment, the independent IMF analysis will rely on IMF forecast data, while
countries' own assessments can use national data.
5.For the identification of countries that will move into the second stage, the selection rules
for G20 countries accounting for more than 5% of G20 GDP (on market exchange rates or
PPP exchange rates) will reflect the greater potential for spillover effects from larger
economies."

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The communiqué released by the finance ministers and central bank governors of the

Events in some Middle-East-North African countries and in Japan have increased

In order to enhance our mutual assessment process to promote external sustainability, we

Commodity prices face increasing pressures. We welcomed the recommendations of the

We agreed to maintain momentum for action to tackle non-cooperative jurisdictions and to

G20 Indicative Guidelines for Assessing Persistently Large Imbalances

1 – A structural approach, which is based on economic models and grounded in economic

3 – A statistical approach which benchmarks G20 country's historical indicators against

4 – A statistical approach which draws on data, benchmarking G20 country's indicators

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