Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation
14.03.2009

Joint statement of Ministers of Finance, Ministers of Economy and Governors of Central (National) Banks of Eurasian Economic Community Member States On Reforming International Financial Architecture

 

JOINT STATEMENT

Of Ministers of Finance, Ministers of Economy and Governors of Central (National) Banks of Eurasian Economic Community Member States

On Reforming International Financial Architecture

 

We, the Ministers of Finance, Ministers of Economy and Governors of Central (National) Banks of Eurasian Economic Community Member States, are determined to enhance our cooperation with international community in order to overcome the global financial crisis and achieve needed reforms in the world’s financial systems.

 

The Member States of Eurasian Economic Community have taken significant and bold measures to stimulate their national economies, provide liquidity, reinforce equity capital of financial institutions, protect deposits and savings; and currently we are engaged in cushioning the effect of the global financial crisis on the economies of our countries.

 

We reiterate our support to the principles of reforming international finance markets and to the Action Plan outlined in the Declaration of the Group of Twenty Summit on November 15, 2008 in Washington.

 

We suggest that in order to implement these principles most effectively, the international community should focus its efforts on the following objectives:

 

Under Strengthening Transparency and Accountability:

- introduce more stringent requirements on information disclosure by market participants with the objective to exclude possibility of resurgence of Ponzi schemes, and modify accounting standards to improve on fair value treatment of financial instruments;

- increase capital adequacy requirements for financial institutions with a view to enhancing their financial sustainability at the time of crisis.

 

Under Reinforcing International Cooperation:

- ensure participation of representatives from emerging markets countries, including also from member states of Eurasian Economic Community, in oversight bodies;

-  launch programs for improving financial literacy of the population at national and international levels with a view to making household finances more sustainable in both long-term and short-term perspectives, and strengthening consumer protection.

 

Under Promoting Integrity in Financial Markets:

- introduce uniform requirements for financial transactions disclosure in different markets;

- develop unified definition of offshore jurisdictions, introduce a more stringent regime of monitoring transactions that involve offshore jurisdictions and, if necessary, implement a set of corrective measures as provided for by the international standards;

- streamline the approaches toward regulation of different sectors of financial market: banking, insurance, securities, and extend regulation to the derivative instruments market as well as to the hedge funds that have remained unregulated so far.

 

Under Reforming International Financial Institutions:

- strengthen the IMF functions of monitoring and surveillance over financial markets of developed countries;

- refine the IMF financial markets monitoring to ensure efficiency of the early warning system in alerting of financial crises;

- consider possibility of scaling up the efforts by multilateral development banks in providing stimulus to the real sectors of economy and increasing investments into emerging markets economies;

- urge the World Bank and regional banks to prevent decline in development assistance and ensure sustainable economic growth in the poorest countries;

- increase the resources of IMF up to a level sufficient to enable it to continue performing the creditor function in the environment of considerable capital outflows from the emerging markets;

- formulate concrete proposals on continuation of reform aimed at increasing representation of emerging markets and developing countries in international financial institutions;

- encourage the emergence of regional mechanisms for mutual support (such as, for instance, the Anti-Crisis Fund created within Eurasian Economic Community);

        

         Within the framework of ensuring sustainability of national economies and greater use of multiple currencies in global economy:

         - enhance the use of multiple currencies in pricing and settling accounts in international transactions;

- take measures to reduce the dependence of the world economy on a single reserve currency;

- in view of the particular responsibility of the countries whose currencies perform the function of international settlement and reserve units, we deem it important that countries with leading roles in the world economy, commit themselves to maintaining macroeconomic stability and adequate regulatory regimes. These countries should provide for unconditional exercise of the right to perform international settlements in their national currencies, with such commitment being formalized in a “Code” of principles and best practices of macroeconomic and financial discipline, a so-called “new Maastricht consensus” or a Stability and Growth Pact on a global scale.

 

We express hope that the measures and reform directions that we are proposing for the global financial system, will be supported by international community, and believe that their implementation will undoubtedly contribute towards reviving the world economy.