The Group of 20 nations need to resolve differences in financial regulations and work toward reducing concerns over a so-called currency war, the head of the Institute of International Finance said.
Government officials should “recommit to this idea of global harmonization and consistency, and to fight against regulatory fragmentation and Balkanization,” Timothy Adams, the IIF’s managing director, said at a news conference in Washington today.
Adams, a former U.S. Treasury undersecretary for international affairs, said he is “heartened” to hear that the Group of Seven nations are considering making a statement to help calm concerns that the world is on the brink of a so-called currency war.
Japanese Prime Minister Shinzo Abe’s push for more aggressive monetary policy has raised concern abroad that his government is directly seeking to weaken the yen, something it denies. The G-7 is looking to release the statement before a Feb. 15-16 meeting in Moscow of finance ministers and central bankers from the Group of 20, which includes the G-7 and emerging markets such as Brazil, China and India.
“There does seem to be some concern that there is insufficient cooperation, communication, coordination among policy makers” to minimize exchange-rate volatility, Adams said.
“Maybe it’s a slight skirmish” rather than a currency war, he said.
In a letter to Russian Finance Minister Anton Siluanov dated today, Adams urged G-20 officials to “reduce policy uncertainty in major countries, including the U.S. and Japan, by putting in place credible medium-term fiscal consolidation plans.”
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