Global balance and financial stability: twin objectives toward a resilient global economic system

Under the impetus of the recent global financial crisis, there has been a growing recognition that the global imbalances are a systemic problem that has a great bearing on the macroeconomic policies of a number of countries as well as on cross-border capital flows, and that they might be linked both directly and indirectly to the global crisis. In this sense, the G20, as the premier forum for the resolution of global economic issues, should lead the drive for comprehensive and systematic reforms to attain global balance and financial stability, twin objectives toward a resilient global economic system. For this, we must first flesh out the Framework established in 2009 to boost policy coordination among member countries. Our efforts made in building the Global Financial Safety Nets and in financial regulatory reform must be maintained, and tangible outcomes must be reached on key issues including improvements in the International Monetary System and the establishment of a Macroprudential Policy Framework. In addition, central banks must develop monetary policy frameworks that can effectively address the problem of boom and bust in asset prices so as to ensure financial stability. The policy coordination pursued by the G20 is indispensable for the shared growth of the global economy, but is not an easy task as it may run counter to the short-term interests of individual countries. However, we have succeeded in narrowing differences between our opinions on major issues over the course of previous G20 meetings, which is itself a valuable step in building up mutual trust. In this regard, I believe the G20 will formulate substantive policy coordination in the future, based upon mutual trust.