Reuters
Fri Sep 4, 2009 11:02am BST

in Brief:

The G20 will promise this weekend to keep economic support packages in place until recovery is certain and seek to reassure financial markets they have credible plans to withdraw the stimulus when appropriate.

Finance ministers and central bankers from the Group of 20 developed and emerging nations are meeting in London to discuss the economic outlook, curbs on bank bonuses, tighter financial regulation and reform of international institutions.



Since their leaders met in April in the midst of the worst global recession since the Great Depression, prospects for the world economy have improved with growth returning in a number of countries and stock markets powering ahead.

But policymakers are cautious about declaring victory yet.

"Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment," said International Monetary Fund chief Dominique Strauss-Kahn at a conference in Berlin on Friday.

G7 sources have told Reuters that the G20's communique, due on Saturday, will likely maintain the pledge to keep policy accommodative for as long as was needed.

"The biggest risk is to think that the job's done -- that recovery is guaranteed. No country can be complacent -- we've got to see this through," Chancellor and meeting host Alistair Darling said late on Thursday.

Still, with interest rates at record lows and trillions of dollars thrown into their economies to fight the crisis, policymakers are also keen to show they have exit strategies in place lest financial markets take fright that inflation will rocket and public finances fall apart.

Other Key points:

"Now is not the time to exit. But I would like to make it clear that the ECB has a strategy, and we stand ready to put it into action when the appropriate time comes," said European Central Bank President Jean-Claude Trichet

France, Germany and Britain on Thursday put forward joint proposals to change the bonus culture at banks that many say was the root of the current crisis.

Other issues on the table are ensuring the IMF gets the full resources promised to it at April's London summit when leaders pledged a mammoth $1.1 trillion (672.9 billion pounds) increase in the lender's firepower.Dinner on Friday will discuss how the IMF and the World Bank can be reformed to reflect better the emergence of the new economic powers.

U.S. President Barack Obama's administration also wants to make climate change a big issue for the Pittsburgh summit and will call on fellow G20 members to eliminate fossil fuel subsidies and increase oil market transparency.

Full article: http://uk.reuters.com/article/idUKL355746120090904

Fluff.....

How bizar the G20 need to increase the money supply even more suggests the crisis is heading for a turbulent time! not so far in the past (a few weeks) Ben Bernanke was held on the shoulders "Hurrah, Hurrah" the recession is over lets exit the liquidity flow.

Just how much liquidity(fresh air currency)are they going stuff in that Trojan horse?