After a meeting on March 14 in Horsham, south of London, the finance ministers and central bank heads of the 19 member states and the European Union said they would back an expansion in the IMF's lending budget in order to counteract the continuing worldwide economic downturn. The IMF would also take a more active role in market supervision, concentrating on analysing the cause of the financial crisis and carrying out supervision and stress to identify future problems.
The Financial Stability Forum, a group of central bank chiefs and financial regulators, will work with the IMF on regular early warning tests, designed to simulate the outbreak of international financial crises.
Multilateral institutions like the IMF and the Asian Development Bank were the best tools to protect developing nations from the crisis, by providing countercyclical lending to substitute for the loss of private-sector capital, attendees said in a communiqué issued after the meeting. The communiquéalso backed better international cooperation between regulators, credit rating agency registration, stronger macro-economic oversight and counter-cyclical regulation.
The meeting comes in advance of the G20 heads of government summit, to be held in London on April 2.