The IMF and the World Bank have issued statements praising the G-20 leaders on the outcome of the G-20 Summit that concluded yesterday in Washington. One by-product of the meeting was the issuance of an Action Plan outlining specific actions to taken prior to March 31, 2009, to ensure compliance with several common principles that were agreed upon by the G-20 leaders. One of the principles agreed upon was a pledge to reform the governance of the Bretton Woods international financial institutions, notably the IMF and World Bank, “by modernizing their governance and membership to encompass ‘greater voice and representation’ by emerging market economies and developing countries.” The G-20 leaders also renewed their commitment to ensure that “the IMF, World Bank and multilateral development banks have sufficient resources to assist developing countries affected by the crisis, and to provide trade and infrastructure financing.”

Mr. Dominique Strauss-Kahn, Managing Director of the IMF, welcomed the “G-20’s endorsement of strengthening the IMF’s mandate in areas of macroeconomic surveillance, lending to member countries in need, and providing assistance to build up capacity in emerging, market and developing countries.” He also praised the G-20 leaders for coming to an “agreement on principles for reform of financial markets, and especially the commitments to reinforce international cooperation.”

Mr. Robert Zoellick, the President of the World Bank Group, in his statement, emphasized that the G-20 leaders must follow through with the commitments made during the G-20 Summit, and acknowledged that the World Bank would continue to expand its “funding, ideas, innovative products and partnership to help developing countries.”

The World Bank and the IMF have both been working actively to mitigate the crisis by promoting various financial aid initiatives to increase liquidity and stabilize weak financial markets. On Friday, the Japanese government in line with some of the sentiments voiced at the G-20 Summit made “a $2 billion investment in one of the World Bank’s funds and a $100 billion loan to the IMF, to provide assistance to countries with merging markets.”