Good afternoon. Earlier today, we finished a very productive summit that will be, I believe, a turning point in our pursuit of global economic recovery.
By any measure, the London Summit was historic. It was historic because of the size and scope of the challenges we face, and because of the timeliness and magnitude of our response.
Listen to President Obama’s opening remarks and his responses to questions from the media:
The challenge is clear. The global economy is contracting. Trade is shrinking. Unemployment is rising. The international financial system is nearly frozen. Even these facts cannot fully capture the crisis that we are confronting. Because behind them is the pain and uncertainty that so many people are facing. We see it back home in our own communities. Families have lost their homes. Workers are losing their jobs and their savings. Students are deferring their dreams. So many have lost so much. Just to underscore this point, jobless claims released back home today were the highest in 26 years. We owe it to all of our citizens to act, and to act with a sense of urgency.
In an age when our economies are linked more closely than ever before, the whole world has been touched by this devastating downturn. And today, the world’s leaders have responded today with an unprecedented set of comprehensive and coordinated actions.
Faced with similar global economic challenges in the past, the world was slow to act, and people paid an enormous price. That was true in the Great Depression, when nations prolonged and worsened the crisis by turning inward, waiting for more than a decade to meet the challenge together. And even in the 1980s, a slow global response deepened and widened a debt crisis in Latin America that pushed millions into poverty.
Today, we have learned the lessons of history. I know that in the days leading up to this Summit, some confused honest and open debate with irreconcilable differences. But after weeks of preparation, and two days of careful negotiation, we have agreed upon a series of unprecedented steps to restore growth and prevent a crisis like this from happening again.
First, we are committed to growth and job creation. Nearly all G-20 nations have acted to stimulate demand, which will total well over $2 trillion in global fiscal expansion. The United States is also partnering with the private sector to clean out legacy assets that are crippling some banks, and using the full force of the government to ensure that our action leads directly to loans that people and businesses depend upon. These efforts will be amplified by our G-20 partners, who are pursing similarly comprehensive programs.
We have also agreed on bold action to support developing countries, so that we aren’t faced with declining markets that the global economy depends upon. Together, the G-20 is tripling the IMF’s lending capacity and promoting lending by multilateral development banks to increase the purchasing power and expand markets in every country
And we have rejected the protectionism that could deepen this crisis. History tells us that turning inward can help turn a downturn into a Depression. This cooperation between the world’s leading economies signals our support for open markets, as does our multilateral commitment to trade finance that will grow our exports and create new jobs.
Second, we are committed to comprehensive reform of a failed regulatory system. Together, we must put an end to the bubble and bust economy that has stood in the way of sustained growth, and enabled abusive risk-taking that endangers our prosperity.
At home, our efforts began with the approach that Secretary Geithner proposed last week, the strongest regulatory reforms any nation has contemplated to prevent the massive failure of responsibility that we have seen. And today, these principles have informed and enabled the coordinated action that we will take with our G-20 partners.
To prevent future crises, we agreed to increased transparency and capital protections for financial institutions. We are extending supervision to all systemically important institutions, markets and products, including hedge funds. We will identify jurisdictions that fail to cooperate, including tax havens, and take action to defend our financial system. We will re-establish the Financial Stability Forum with a stronger mandate. And we will reform the IMF and World Bank, so they are more efficient, effective, and representative.
Finally, we are protecting those who don’t always have a voice at the G-20, but who have suffered greatly in this crisis. The United States is ready to lead in this endeavor. In the coming days, I will work with Congress to provide $448 million in immediate assistance to vulnerable populations, and to double support for agricultural development to over $1 billion so that we are giving people the tools they need to lift themselves out of poverty. We will also support the United Nations and World Bank as they coordinate the rapid assistance necessary to prevent humanitarian catastrophe. This is not just charity though. These are future markets for all countries, and future drivers of growth.
Let me also underscore my appreciation to Prime Minister Brown and all my colleagues from around the world who contributed to this Summit’s success. It’s hard for 20 heads of state to bridge their differences. We’ve all got our own national policies, our own assumptions, and our own politics. But our citizens are hurting. They need us to come together. So I’m pleased that the G-20 has agreed to meet again this fall. For this is just the beginning. Our problems won’t be solved in one meeting. We must be proactive in shaping events and persistent in monitoring our progress to determine whether further action is needed.
I also was pleased to have had the opportunity, while in London, to hold bilateral meetings with the leaders of Russia, China, South Korea, Saudi Arabia and India, as well as Great Britain. These discussions were valuable and productive. Of course, we spoke about additional steps to promote economic recovery and growth. But we also discussed coordinated actions we could take to reduce the nuclear threat, forge a coordinated response to North Korea’s planned missile launch, turn back terrorism in Afghanistan and Pakistan and protect our planet from the scourge of climate change. I am encouraged that we have laid the groundwork for real and lasting progress.
The challenges of the 21st century cannot be met without collective action. Agreement will almost never be easy, and results won’t always come quickly. But I am committed to respecting different points of view, and to forging a consensus instead of dictating our terms. That is how we made progress these last few days. And that is how we will advance and uphold our ideals in the months and years to come.
I’ve spoken often, at home, about a new era of responsibility. I believe strongly that this era must not end at our borders. In a world that is more and more inter-connected, we have a responsibility to work together to solve common challenges. It will take time. But we can rebuild our global prosperity if we act with the sense of common purpose, persistence, and optimism that our moment demands. Thank you.