OTTAWA - Finance Minister Jim Flaherty is urging the world's top economies to do what they have said they would -- and quickly -- so that early signs of improvement in the world outlook can be sustained.
Flaherty wants other countries to move ahead with plans to shore up their banking systems and proceed with stimulus packages.
"We are in a time where there are some hopeful indicators but we want to keep those hopeful indicators improving and multiplying," he said Saturday during a conference call from Washington during meetings with finance ministers and central bankers from top nations.
"For economic reasons and for confidence-building reasons, we need all of these countries, including Canada, to fulfil their commitments and we need it to happen rapidly."
Flaherty said he was particularly encouraged with very recent steps taken by the United States to fix its broken banking system, which he called the "sine qua non" of global recovery.
The United States had committed to releasing some information on results of the government's stress tests of 19 of its biggest banking institutions on May 4, he said, and on moving ahead with recapitalizing troubled banks.
"I appreciate that action after, let's face it, a rather long time," Flaherty said, adding that Germany's announcement of similar actions is also welcome.
The Federal Reserve said Friday some distressed banks would need to raise more cash but all 19 had sufficient capital to cover expected new losses. The test of bank health is seen as the first step toward putting more government funds into trouble banks.
Heading into the meetings, both Flaherty and Bank of Canada governor Mark Carney openly criticized the U.S. and some European countries for slow action on restoring confidence and solvency in their countries banking sectors.
Carney earlier this week cited the lack of sufficient progress as the key reason he was darkening his outlook on the Canadian and world economies, saying the delay had likely prolonged the recession by one quarter (three months).
And while the U.S. progress unveiled during the meetings was welcomed, Flaherty did not back-track on previous criticism.
"This financial crisis started in August 2007," he noted. "It has been known for some months that it is essential that some countries act to clean up the banks and that there has been slowness by some countries in doing that, including the U.S. There is a new administration in the U.S., they are taking action now ... so I want to encourage them to follow through and get it done."
In statements released during the meetings, the ministers underlined the need for collaboration and decisive action and support for what has occurred so far.
And they said they were encouraged that the worst of the most severe global economic collapse since the Great Depression may be in the past, although recovery will be slow and muted.
But there were also indications of tensions, including difficulties raising US$500 million in additional funds that the International Monetary Fund intends to use in meeting the needs of poor nations.
Emerging economic powers such as China, Russia, Brazil and India are tying meeting their funding commitments to achieving a greater role in governance of the IMF, and want the Washington-based international agency to issue bonds to raise funds.
In his Saturday teleconference, Flaherty sounded at times encouraged and frustrated with the overall level of agreement among officials about what needs to occur and, at the same time, the slow pace some were approaching the task.
He insisted that Canada had taken the lead both in terms of committing to additional funding to the IMF and passing a stimulus budget that exceeded what the G-20 countries said was needed. Ottawa calculates its stimulus to be worth $40 billion over two years, more than two per cent of gross domestic product.
Without naming individual countries, Flaherty said it was imperative that they do what they have already pledged to do in implementing their individual stimulus measures.
