WORLD TRADE  
ORGANIZATION  WT/L/737 
12 November 2008 
 (08-5501) 
Informal Heads of Delegation Meeting 
12 November 2008 Original: English 
 
 
 
10TH ANNUAL MEETING OF G-20 FINANCE MINISTERS  
AND CENTRAL BANK GOVERNORS  
 
São Paulo, Brazil, 
8-9 November 2008 
  
 The following communication, dated 11 November 2008, is being circulated at the request of 
the Delegation of Brazil on behalf of the G-20. 
 
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COMMUNIQUÉ 
  
1. We, the Finance Ministers and Central Bank G overnors of the G-20, held our tenth annual 
meeting in São Paulo, Brazil. We met at a time when the global economy is facing its most serious 
financial crisis and economic slowdown in decades. We discussed the causes of and policy responses 
to the global financial crisis, and shared persp ectives on scenarios going forward, with a particular 
focus on ensuring financial stability, supporting glob al growth and maintaining recent achievements 
in poverty reduction and social inclusion. 
2. We welcomed that the Heads of G-20 countries will convene for a Leaders´ Summit on 
Financial Markets and the World Economy to be  held on 15 November 2008 in Washington, noting 
that the global crisis requires global solutions  and a common set of principles and that the 
forthcoming summit is an important step in enhanc ing international cooperation. We stand ready to 
urgently take forward work and actions agreed by  our leaders to restore and maintain financial 
stability and support global growth. 
3. We noted that the current financial crisis is la rgely a result of excessive risk taking and faulty 
risk management practices in financial markets, in consistent macroeconomic policies, which gave rise 
to domestic and external imbalances, as well as defi ciencies in financial regulation and supervision in 
some advanced countries. 
4. The key challenge is to resolve the financial crisis in a durable manner and to mitigate the 
impact of the crisis on global economic activity through comprehensive, coordinated and timely 
measures as appropriate. Measures must be designed no t only to restore growth and financial stability, 
but also to minimize the negative social impact particularly in emerging and low income countries. 
The G-20, with its broad representation of major syst emically important economies, has a critical role 
to play in ensuring global financial and economic stability, and, with that purpose, is committed to 
enhancing collaboration. WT/L/737 
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  5. We welcomed the bold and decisive measures taken in a number of countries to stabilize 
financial markets and restore the flow of credit,  to support global economic growth. These measures 
have begun to stabilize the banking system and ot her financial sectors. However, there remains 
considerable volatility in global financial markets. We will continue to work together to take all 
necessary actions to reduce this volatility and rest ore normal functioning of money and credit markets 
in both advanced and emerging market countries. 
6. We agreed that all countries must address the risks associated with excessive leverage and 
improve their regulatory and superv isory regimes in order to deli ver improved risk assessment and 
management by financial institutions, to enhance tr ansparency and accountability in financial markets, 
as well as to strengthen international cooperation to  identify and respond preemptively to national and 
international systemic risks. Furthermore, we re cognized the need to improve the supervision and 
governance of financial institutions, at both national a nd international levels. In  this regard, we should 
consider ways of enhancing the id entification of systemically importa nt institutions and ensure proper 
oversight of these institutions, including credit ratin g agencies. We should ensure that all sectors of 
the financial industry, as appropriate, are regulated or subjected to oversight. We agreed that it is 
important to address the issue of pro-cyclicality in financial market regul ations and supervisory 
systems. We also agreed that financial institu tions should have common accounting standards and 
clear internal incentives to promote stability and th at action needs to be taken, through voluntary 
effort or regulatory action, to avoid compensation schemes which reward excessive short-term returns 
or risk taking. Regulators and supervisors should e nhance their vigilance and cooperation with respect 
to cross-border flows. 
7. We expressed concern over the impact of the sp reading international financial crisis on the 
real economy through trade, credit and currency tran smission channels. We considered in particular 
the severe challenges it poses to short-term growth. Advanced economies, where the crisis came into 
being, are slowing markedly and some are alrea dy close to or in recession. We are also seeing 
evidence of slower growth in emerging markets, and while overall these countries should continue to 
play an important role in supporting world growth , emerging economies are facing external financing 
pressures. We recognized that a pronounced lack of  confidence has led to severe credit constraints, 
which affects consumption, invest ment and employment. We affirmed  our determination to take all 
necessary steps to foster non-inflationary growth in  a stable and sustainable manner according to the 
needs and available instruments in our respective countries, including through monetary and fiscal policy. We recognized the need to support the e fforts of the emerging economies and, especially, to 
help them find additional resources for their development. We urged all countries to resist 
protectionist pressures, whether in respect of trade or investment, and reiterate our strong support for a 
prompt and ambitious conclusion of the Doha  Development Round of trade negotiations. 
8. One of the most deleterious aspects of the current  crisis is the freeze in the private credit and 
equity markets and the tendency of capital to flow back to where the current crisis originated. We 
should explore ways to restore emerging and developing countries’ access to credit and resume 
private capital flows which are critical for sustaina ble growth and development, including ongoing 
infrastructure investment. 
9. We noted that fiscal policies have served as an  important instrument to address the current 
financial crisis, including through government support to the financia l sector and have performed an 
important stabilization role and in mitigating fu rther negative effects on markets and on economic 
activity. Some countries are also considering add itional fiscal measures to stimulate the economy and 
we agreed that countries must use all their policy flexibility consistent with their circumstances, to 
support sustainable growth, while we recognize the importance of fis cal sustainability for 
macroeconomic stability and growth. It is essential th at the recent gains in reduction of poverty and 
social inequality are not set back by the fina ncial crisis and global economic slowdown. Less 
developed countries would probably need more fl exible frameworks. Furthermore, in cases where  WT/L/737 
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  severe market disruptions have limited access to the necessary financing for counter-cyclical fiscal 
policies, multilateral development banks must ensure  arrangements are in place to support, as needed, 
those countries with a good track record and sound policies. 
10. We recognized that many low income countries are particularly vulnerable to commodity 
price volatility and changes in investor sentiment due to the financial crisis. We agreed on the 
importance of maintaining official flows, including aid flows, to these countries in line with existing 
commitments and urge all multilateral development ba nks to work to sustain the momentum of infra-
structure investment for devel opment in low income countries. 
11. We recognized the relevance of adopting soun d monetary policies. The recent slowdown in 
world growth and consequent reduction of commodi ty prices have decreased inflationary pressures 
especially in advanced economies and permitted central  banks to decide on monetary easing. In those 
economies facing currency depreciation and still su ffering from second round effects, inflationary 
pressures may be more persistent. In this context,  monetary authorities will need to continue to 
carefully monitor economic developments, including the consequences of financial deleveraging, in 
order to take appropriate action if needed. 
12. We underscored that the Bretton Woods Institutio ns must be comprehensively reformed so 
that they can more adequately reflect changing economic weights in the world economy and be more 
responsive to future challenges. Emerging and developing economies should have greater voice and 
representation in these institutions. We welcome the progress made this year in reforming the IMF. 
We also noted the first step in the ongoing process of reform of the World Bank Group, which is to be followed by a wider share realignment. We emphasi zed our commitment to further reform the Bretton 
Woods Institutions in order to increase their leg itimacy and effectiveness. Such reforms should also 
take into account the interests of the poorest countries and reflect their distinct mandates. 
13. At this juncture, the IMF, the World Bank Grou p and other international financial institutions 
have an important role to play, consistent with their mandates, in helping to stabilize and strengthen 
the international financial system, advancing inte rnational cooperation for development and assisting 
countries affected by the crisis. To meet this task , we should review the adequacy of the resources of 
the IMF, the World Bank Group and other multilateral development banks and st and ready to increase 
them where necessary. In this context, we welc ome the use of the IMF´s emergency procedures to 
provide substantial assistance quickly to countries in need, and also the creation of a new short-term 
liquidity facility, which allows quick disburse ments without traditional conditionality for countries 
with strong economic policy track records. We urge  the IMF to continue to review and adapt its 
lending instruments to adequately meets its member needs and revise its lending role in the light of 
ongoing financial crisis. 
14. We agreed that we must draw policy lessons  from the current crisis andtake all necessary 
steps to restore market confidence and stability and to  minimize the risk of a future crisis. Given its 
near universal membership and core macro-financial e xpertise, the Fund should take a leading role in 
this task consistent with its mandate. We belie ve that the IMF must enhance its early warning 
capabilities with due regard to systemically importa nt economies, in order to anticipate stresses and 
identify at an early stage vulnerabilities, system ic weaknesses and spillover risks across financial 
markets that can endanger both the international fi nancial system and the global economy. We also 
underline the importance of strengthening the IM F surveillance and policy advice leading to 
appropriate and timely macroeconomic policy responses from all countries. 
15. In response to the challenges presented by the global financial situation, and recognizing the 
global nature of financial markets, we believe th at the FSF must expand to a broader membership of 
emerging economies.  WT/L/737 
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  16. We agreed that the G-20 plays a vital role in responding to challenges facing the world 
economy and must maximize its effectiveness.G-20 de liberations should focus primarily on concrete 
policy outcomes. Consideration should be given to holding G-20 Ministers and Central Bank 
Governors’ meetings in the run-up to the meetin gs of the Bretton Woods institutions with the 
flexibility to hold ad hoc Minist erial meetings when necessary. 
17. We thanked our Brazilian hosts for chairing the G- 20 this year, and looked forward to further 
effective collaboration in the G-20 next year under the United Kingdom’s chair. We welcome the 
Republic of Korea as a member of the Troika in 2009 and chair of the G-20 in 2010. 
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