NEW YORK (Reuters) – Billionaire investor George Soros applauded world leaders at the Group of 20 summit on Thursday, saying that for the first time they took a proactive, rather than a reactive, approach to the global financial crisis.
“I would say that it is probably the first time that the authorities are actually ahead of the curve,” Soros told CNBC.
World leaders of the largest developed and emerging economies meeting in London clinched a $1.1 trillion deal on Thursday to combat the worst economic crisis since the Great Depression and said financial rules would be tightened to stop it from happening again. For details, please see [ID:nL1230573].
“They managed to get more than I expected. They really pulled a few rabbits out of the hat and I think it was a very impressive communique,” Soros said.
In particular, he praised British Prime Minister Gordon Brown, the summit host.
Brown was in “truly, probably his finest hour,” Soros said. “He really did see the need for addressing this global problem. You have the less developed world facing a potential collapse, as the banks don’t roll over their loans, so something had to be done.”
The G20 tripled the International Monetary Fund’s resources, adding $500 billion for a total of $750 billion, giving it more firepower and putting it center stage in the battle against the global financial crisis.
The G20 also agreed to support a general allocation of $250 billion worth of IMF Special Drawing Rights to IMF member countries to boost liquidity at a time when credit markets are frozen.
The IMF’s Special Drawing Rights are an international reserve asset to supplement existing reserve assets.
“They managed to put together a bigger package than anybody expected and very importantly the issue of Special Drawing Rights — $250 billion,” Soros said.
“That is effectively internationally creating new money and that will help to allow the countries that are not able to print their own monies — the way we can — actually to stimulate their economies. I think the way for the rich countries to transfer their allocations to the most needy countries can be worked out.” (Editing by Leslie Adler)