G 20 nods for $1.1 trillion stimulus package

The Group of 20 policy makers (G- 20) members, comprising 20 of the world's wealthiest nations and nine international institutions, on evening Thursday, 2 April 2009 announced a clutch of big-ticket measures to breathe life into the world economy, battered by the sharpest downturn since the Great Depression of 1930s. The G-20 leaders agreed to pump in $1.1 trillion of extra financing to support the International Monetary Fund (IMF) and lubricate world trade. The main chunk of this consists of $750 billion of extra financing for the IMF. The leaders of the world's big economies also said they would commit $250 billion to enhance trade flows. The meeting, attended by leaders of emerging market giants India, China and Brazil, also pledged to fight protectionism and exercise stronger regulation of hedge funds and tax havens. The six-point pledge in a statement issued after the summit of leaders of the G-20 countries also contained steps to strengthen financial regulations and supervision. It agreed to establish a new financial stability board (FSB) with a strengthened mandate and representation from all G-20 members. The leaders agreed to take action against tax havens and end the era of banking secrecy through an OECD mechanism for exchange of tax information. They also announced that a $5 trillion stimulus package would be delivered by the end of 2010 to tackle the worst economic recession since 1930. Though the London Summit was a follow up to the G20 meet in Washington last year, Thursday's 2 April 2009 meeting assumed far greater importance in the light of collapse of the global financial system over the past few months. The overall agenda of this meeting was to find ways and means to overcome the global recession and impose stricter regulations over the global banking sector.