Obama: G20 more than a talk shop

  • Published : Nov 12, 2010 - 21:51
  • Updated : Nov 12, 2010 - 21:51

U.S. President Barack Obama defended the credit easing by the U.S. Federal Reserve, which was much criticized for pouring destabilizing liquidity into emerging markets and keeping the dollar’s value low.

He said the Fed’s move was not one designed to have an impact on the value of the dollar, but that it was designed to grow the U.S. economy.

“Their (emerging markets) main concern is that the U.S. isn’t growing fast enough. The U.S. is the world’s largest market, they want to see us grow ,” he said during a news conference after the Group of 20 summit in Seoul.

The Fed decided to provide $600 billion in stimulus through buying Treasury bonds to push interest rates lower and encourage borrowing. The decision sparked allergic responses from emerging economies including China and Brazil as they watched their currencies appreciate.

U.S. President Barack Obama reacts during a press conference at the G20 Seoul Summit held at COEX in Seoul on Friday. Yonhap News
He said there was not a lot of discussion about the Fed’s decision in the leaders’ meetings.

He also hailed the G20 Seoul Summit for reaching landmark accords to reform financial systems, address trade imbalances and avoid trade protectionism

“There is search for drama (from the press), but what is remarkable is that we actually made real progress,” Obama told news conference ending the two-day summit in Seoul.

Emphasizing the breakthroughs the G20 pulled off, he called the 6 percent shift leaders endorsed on the reform of the International Monetary Fund a major achievement that had not seen progress beyond mere consideration for more than a decade. A number of agendas including financial regulatory reform, agreements against trade protectionism and development were also mentioned as achievements brought out in “a short period of time.”

Obama stongly objected to criticism of the G20 as just a “talk shop.”

“The work that we do here is not always going to seem dramatic. It‘s not always going to be immediately world-changing. But step by step what we’re doing is building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions," he said.

Leaders in Seoul agreed to shun competitive devaluations of currencies, urging countries to move “towards more market-determined exchange rate systems, enhancing exchange rate flexibility to reflect underlying economic fundamentals.” They endorsed tougher financial regulations and vowed to tighten control of influential banks.

By Cynthia J. Kim (