Bold Action May Be Needed to Stave Off Deep Global Recession

United States Council for International Business appeals to G-20 to keep markets open

The U.S. Treasury: G-20 leaders will meet in Washington this weekend to address the global financial crisis.
The U.S. Treasury: G-20 leaders will meet in Washington this weekend to address the global financial crisis.

New York, N.Y., November 13, 2008 – The United States Council for International Business (USCIB), which represents America’s top global companies, applauded recent actions by governments attending this weekend’s G-20 Summit meeting in Washington to restore confidence in financial markets worldwide.  But it said additional steps might be needed to keep the global economy out of a deep recession.

“The goal must be to get capital moving once again,” said USCIB President Peter M. Robinson.  “Concerted action is essential so companies can get the money they need to finance everyday operations.  The G-20 governments must work together to make sure the liquidity they have pumped into the system finds its way to the right targets.”

In a statement, USCIB said the complexity of financial instruments, coupled with a lack of transparency in some financial sectors, had compounded regulators’ work.  But it warned against an overreaction.  “Although new regulation may be needed, it must be targeted, prudent and sensible.  By freezing asset flows, overregulation can do as much damage to the world economy as a weak regulatory framework.”

USCIB also called for the G-20 to support continued convergence of global financial reporting standards.

The pro-trade group said that, alongside efforts to strengthen capital markets, improve transparency, and promote sensible regulation, G-20 countries needed to work together to keep markets open to international trade and investment.  “There is a real risk that some countries may resort to border measures to protect their domestic economies.  Such policies failed during the Great Depression and are not likely to be any more effective today.”

USCIB called for a renewed effort to conclude the WTO’s Doha Round of trade talks, which have foundered after seven years of negotiations.  It said success in the trade round would not be possible without the full participation of all key players.

The statement objected to calls by some countries to restrict investment flows or to channel them to certain industries.  “USCIB regards as especially pernicious the notion of using national security reviews of inward investment as some form of industrial policy where governments, not markets, pick the winners and losers and also discriminate against foreign investment,” it said.

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership includes more than 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $4 trillion.  As American affiliate of three global business groups – the International Chamber of Commerce, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD – USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade.

Contact:
Jonathan Huneke, VP Communications & Public Affairs, USCIB
(212) 703-5043 or jhuneke@uscib.org

Full USCIB statement to the G20 leaders

Other recent statements on the financial crisis by USCIB and its global affiliates

 

Staff Contact:   Jonathan Huneke

VP, Communications and Public Affairs
Tel: 212.703.5043

Jonathan Huneke is responsible for USCIB’s strategic communications, including media relations, publications, online content and high-level public events. He also manages the work of USCIB’s Marketing and Advertising Committee.
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