G-7 Ministers willing to intervene for financial market stability
Aug 8 (BusinessDesk) – Finance Ministers and central bank governors of the world’s seven largest developed economies, known as the G-7, are signalling a willingness to intervene in foreign exchange markets to cope with “excess volatility and disorderly movements” in major currencies.
In a statement issued just after 8 p.m. Sunday evening, eastern U.S. time, the statement says “we reaffirmed our shared interest in a strong and stable international financial system, and our support for market-determined exchange rates.”
“Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability,” the statement said. “We will consult closely in regard to actions in exchange markets and will cooperate as appropriate.”
The statement of solidarity comes as financial markets around the world start opening a new week after their worst one day fall since 2008, during the global financial crisis, raising the spectre of a new crisis and a double-dip recession in the developed world.
“We are committed to taking coordinated action where needed to ensuring liquidity and to supporting financial market functioning, financial stability and economic growth.”
The G-7 ministers also affirmed that the inclusion of private sector lenders in last month’s Greek bail-out was “an extraordinary measure due to unique circumstances that will not be applied to any other member states of the euro area.”
They welcomed the U.S. debt ceiling package, passed by Congress after 11th hour wrangling last week, and announcements by the Spanish and Italian governments about their intention to accelerate fiscal policy reforms to deal with their unsustainable public debt levels.
“We will remain in close contact throughout the coming weeks and cooperate as appropriate, ready to take action to ensure stability and liquidity in financial markets.”
G-7 member countries are the U.S. Britain, France, Germany, Japan, Italy, and Canada.