Newspaper article International New York Times

Markets Are Worrying Too Much, G-20 Says ; Economic Ministers Tout Strengths and Reject Big Policy Shifts at Summit

Newspaper article International New York Times

Markets Are Worrying Too Much, G-20 Says ; Economic Ministers Tout Strengths and Reject Big Policy Shifts at Summit

Article excerpt

The finance ministers from the world's 20 largest economies wrapped up a day and a half of meetings with a message that the markets worry too much.

Through the winter, world financial markets have tumbled and churned with a succession of worries. The Chinese economy seemed to be faltering. Commodity exporters like Russia and Brazil suffered sharp slowdowns. And with oil prices falling, banks that have lent heavily to energy companies could be hurt.

On Saturday evening, finance ministers from 20 of the world's largest economies wrapped up a day and a half of meetings with a rough consensus: The markets worry too much.

The ministers turned aside suggestions that they embark on any radical changes in policy, like realigning the exchange rates of major currencies. They endorsed instead a stepped-up combination of monetary policies, government spending and structural changes, altering the wording of Saturday night's communique from communiques last year to put somewhat greater emphasis on these policies.

The ministers tried hard to persuade investors around the world that they were missing basic strengths in the global economy.

"The magnitude of the recent market volatility has not reflected the underlying fundamentals of the global economy," said Lou Jiwei, the finance minister of China, the country that holds the group's presidency this year.

Led by China, finance ministers from the Group of 20 agreed on Saturday to inform one another of all major changes in currency policies to avoid surprises that could shake up global financial markets.

The agreement to share information came in addition to renewing a previous commitment by large economies not to devalue their currencies to obtain a competitive advantage for their exporters. Devaluations make exporters' goods less expensive in foreign markets.

The information sharing agreement was prompted by actions in recent months by China and Japan. China unexpectedly made small devaluations in its currency in early August and in late December, both times leading to drops in world stock markets. Japan has embraced negative interest rates and pushed hard to expand its money supply, moves that have made it less attractive to hold yen. …

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