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G20 Finance Ministers' Meeting: day two.

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At today’s meeting of G20 Finance Ministers and Central Bank Governors, in the session focusing on the G20 Leaders’ Meeting next weekend, I will lead a discussion on the central role of the G20 in addressing the global financial crisis.

The global financial crisis requires global solutions that need to be formulated with the full participation of the world’s largest and most systemically important economies - including major developing economies such as China, India and Brazil.

That is why Australia has argued strongly for next weekend’s G20 Leaders’ Meeting and why I will be calling for an enhanced ongoing role for the G20 in global financial stability issues.

The G20 Leaders’ Meeting will be a vital step in the process of finding a pathway for reform - so we can prevent this kind of global crisis from occurring again in the future.

The Prime Minister in his speech to the UN General Assembly on 25 September outlined the need for the G20 to provide political authority for financial system reform and to ensure that financial stability is at the centre of its work program.

On Saturday Finance Ministers considered the World Bank’s report setting out the serious potential implications of the global financial crisis for developing economies.

The report notes that “should the freeze in credit markets not thaw quickly enough, then the consequences for developing countries could be severe”.

As I have noted over recent weeks, if the more pessimistic forecasts for the global economy materialise, and if international conditions deteriorate further, there are downside risks for the Australian economic outlook as well.

These downside risks further reinforce why the Government has been arguing strongly for further coordinated global responses through the G20.

I will also be supporting Korea as chair of the G20 in 2010. Korea’s selection as host would further demonstrate the important role that countries in our region play in the global economy. Korea would follow the United Kingdom’s 2009 host year.

I will travel tonight to Washington to meet with key US economic policy-makers in preparation for the G20 Leaders’ meeting which the Prime Minister and I will attend

this week. In these meetings I will discuss the Leaders’ Meeting agenda, as well as US economic, financial and regulatory developments.

9 November 2008

Sao Paulo, Brazil

Contact: Matthew Coghlan 0415098050 (Sao Paulo) Matthew Martyn-Jones 0419418394 (Canberra)