WASHINGTON (Kyodo) U.S. Treasury Secretary Timothy Geithner wants Japan to play an active role in the global economy when the Group of 20 leaders gather in London on Wednesday and Thursday.
The U.S. expects Asia’s largest economy to play “a role commensurate with Japan’s importance in the global economy,” Geithner said in a briefing to journalists Monday ahead of the G20 summit of industrial and emerging countries.
Prime Minister Taro Aso is expected to announce during the summit a plan to boost aid to Asian economies by ¥500 billion, bringing Japan’s total aid to the region to ¥2 trillion, government sources said.
Geithner said the London summit will address two key topics — a coordinated approach toward accelerating recovery of the global economy and reform of the international financial system.
“Our hope is that we’ll come together and agree on a coordinated approach to promote recovery in the global economy and to put in place some reforms in the international financial system that will help prevent future crises of this severity,” he said, terming both issues “critically important” to the G20.
Geithner also indicated the G20 framework may take on greater importance as a place for addressing international finance in the future.
“And that’s a very important step — first time really ever you’ve seen an institution whose core responsibility is broad standards for the financial regulation, standards for oversight, bring to the table, around the table, not just the classic G7, G-10 economies but the major emerging market economies,” he said.
“That’s just a demonstrated recognition of their greater role in the system and our view that there will be more confidence in the system as a whole if those countries have a role in shaping and contributing to the design of those standards,” he added.
On a proposal to review the dollar as the key currency in world finance, Geithner said, “I believe the dollar will be the principal reserve currency for a long time to go.”
“The policy of the United States is that a strong dollar is in the interest of the United States,” he said.
Geithner withheld comment on the proposed allocation of special drawing rights, an international reserve asset created by the International Monetary Fund, to developing countries. “I think I want to reserve any comment on the SDR until you see the results of the meeting.”
The London summit will bring together leaders from the Group of Seven major industrialized countries — Britain, Canada, France, Germany, Italy, Japan and the United States — and major emerging economies such as Brazil, China, India and Russia.
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