FROM THE OFFICE OF PUBLIC AFFAIRS

Good evening. I want to begin by noting how much I have enjoyed meeting my colleagues and how much I appreciate the productive and thought-provoking discussions we have had today. Coming together to share ideas and discuss key issues that we all face is indeed an important and useful opportunity. We live in a global economy in which developments in one country affect others, and thus it is important to work closely together - in the G-7 in particular - to promote common goals.

Although world growth has slowed somewhat, we agreed that the fundamentals for sustained growth remain in place and that macroeconomic and structural policies need to focus on supporting growth. My colleagues were particularly interested in hearing about the U.S. economy and our policies. We noted that policies in Europe need to focus on enhancing growth potential, and we shared concern about remaining downside risks in Japan.

On exchange rates, let me repeat for you what we said together:

• "We discussed developments in our exchange and financial markets. We reiterated our view that exchange rates among major currencies should reflect economic fundamentals. We will continue to monitor developments closely and to cooperate in exchange markets as appropriate."

Finance Minister Kudrin and Central Bank Governor Gerashenko joined us to discuss Russia's economic policy priorities. Together, the G-7 urged the Russian authorities to step up the process of economic reform and meet in full their financial obligations. As they face the task of reform, we underscored the importance of creating the policy, regulatory and legal infrastructure necessary to make market economies work. We also urged Russia to move quickly to take action against money laundering, as outlined by the Financial Action Task Force (FATF) in June 2000.

We took note of recent progress under the HIPC debt initiative and indicated the importance of a broader approach to poverty reduction - an issue that we will focus our attention on as we prepare for the Genoa Summit. We also recognized progress and looked forward to further steps to strengthen the international financial architecture, including the need to do a better job in anticipating and preventing crises. In particular, we discussed the key priorities for reform of the multilateral development banks - greater selectivity, sharper focus on the needs of the poorest countries, more effective and transparent internal governance and enhanced development impact. This issue will be a key focus when we next meet in Washington in April.

Finally, we reviewed developments in our shared effort to fight financial abuse. We look forward to continued steps by identified jurisdictions to undertake needed reforms and urged the IMF and World Bank to help countries implement relevant anti-money laundering standards. At the same time, we reiterated our commitment to implement coordinated countermeasures in cases in of ongoing non-cooperation, based on recommendations by FATF. We also reaffirmed our support for efforts to address harmful tax practices. While I indicated to my colleagues that certain aspects of these efforts are under review by the new Administration, I support the priority placed on transparency and cooperation to facilitate effective tax information exchange. At the same time, it is critical to clarify that this project is not about dictating to any country what should be the appropriate level of tax rates.

Again, I found today's discussion very useful, and I look forward to working closely with all my G-7 colleagues.

Attachment:

Statement of G7 Finance Ministers and Central Bank Governors