UNITED STATES: Restoring Global Financial Security

…For the United States, for ordinary citizens in the United States, and for their counterparts throughout the world, there are few more important things for leaders to be doing than working on building a stable financial architecture for the new century….

First, we industrial countries should take steps to reduce the entire financial system’s vulnerability to rapid capital flows and excess leverage. For example, we should strengthen bank regulations so they actually take into account the real risks of lending.

Second, we should continue to develop a better way to respond to crises, including appropriate sharing of responsibility by the private sector.

Third, developing countries should take more responsibility as well, by strengthening financial regulation and bank supervision, and developing sustainable debt management policies, thus avoiding excessive reliance on short-term debt. …

Fourth, the international financial institutions should focus their efforts on encouraging developing countries to adopt sustainable exchange rate regimes and the macroeconomic policies necessary to support them.

Fifth, we must ensure that the most vulnerable citizens do not bear the brunt of these crises. That means the IMF and the World Bank must pay more attention to social safety nets, working with countries to lay strong foundations during good times and to maintain adequate protections during bad times. …

Sixth, we must remember that the poorest countries — nations that private capital flows are bypassing altogether — need help because they are burdened with unsustainable levels of debt. … No nation committed to good governments and economic reform should be crushed by a debt burden that it is so heavy it will punish ordinary citizens and prevent growth, no matter what people do.

If we take these steps, … we can put a human face on the global economy. We can show people … the world, that there won’t just be economic numbers showing growth, but their lives will be actually improved by the work we do to draw closer together.

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