| LONDON, March 10
LONDON, March 10 Finance ministers and central
bankers from the G20 group of leading industrialised nations
meet in Germany next week for the first time since Donald Trump
was elected president of the United States.
In light of recent comments from the White House about the
dollar, global financial imbalances and world trade, it could be
one of the most crucial gatherings in the four-decade history of
G5, G7 and G20 meetings.
Washington has accused Germany, Japan and China of
exploiting exchange rate weakness for competitive advantage over
the United States. And with Trump looking to make good on the
protectionist, isolationist and "America First" platform he was
elected on, G20 officials may struggle to present a united front
on March 17-18 in Baden-Baden.
Below is a timeline tracing the history of cooperation
between G7 and latterly G20 countries on world trade and
financial conventions - especially in relation to foreign
exchange - including direct, coordinated FX market intervention.
March-October 2011 - G7 nations jointly intervene in March
to stem yen strength when the currency spikes against the dollar
after a massive earthquake in Japan. This is G7's last
coordinated intervention in FX markets. Tokyo then acts alone
again in August and October.
September 2010 - Japan intervenes for the first time in six
years after the U.S. dollar hits a 15-year-low of 82.87 yen.
Tokyo acts alone, but its move will have been tacitly approved
at G7 level.
March 2009 - G20 finance officials meet in Horsham, England,
ahead of the leaders summit in London a few weeks later. With
the world economy and financial system still reeling from the
Lehman fallout, participants agree to take coordinated action to
stimulate demand and employment. They also pledge to fight
against all forms of protectionism. It is perhaps G20's high
water mark - the low for world stock markets turns out to be in
March, and the global economy begins to recover.
November 2008 - The first G20 leaders summit takes place in
Washington under the banner "Financial Markets and the World
September 2008 - As the world economy and financial system
plunges into crisis following the collapse of Lehman Brothers,
G7 pledges to "protect the integrity of the international
financial system and facilitate liquid, smooth functioning
markets". It stands ready "to take whatever actions may be
necessary, individually and collectively, to ensure the
stability of the international financial system."
September 2003 - In the midst of concerted intervention from
Japan, and China refusing to loosen the yuan's peg to the
dollar, G7 issues a strongly worded communique on FX in Dubai.
It says "more flexibility in exchange rates is desirable for
major countries or economic areas to promote smooth and
widespread adjustments in the international financial system,
based on market mechanisms."
May 2002-March 2004 - The Bank of Japan intervenes regularly
and in record amounts to curb the yen's rise, mostly alone but
also on occasion with the ECB and Fed.
September 2001 - The BOJ on its own and with ECB, euro zone
central banks and New York Fed, intervenes to sell yen for
dollars, worrying about an export-crippling rise in the value of
the yen following the 9/11 attacks.
September-November 2000 - Central banks in Europe, Japan and
the United States, acting together for the first time since
1995, intervene to drive the euro higher after the currency hits
an all-time low below $0.8225, a loss of nearly 30 percent of
its value since its January 1999 launch.
September 1999 - G20 finance ministers and central bankers
meet for the first time under the banner of G20, "a group of
countries representing both developed and emerging economies
from every region of the globe (whose) purpose is to ensure
broader participation in discussions on international financial
affairs among countries whose size or strategic importance gives
them a particularly crucial role in the global economy."
January 1999-April 2000 - Concerned that the strong yen will
choke off a fragile economic recovery, Japan intervenes in FX
markets to tame its strength. The BOJ sells yen at least 18
times in this period, including once via the Fed and once via
April-June 1998 - With the yen weakening, the BOJ intervenes
to support its currency. As the yen crumples below 144 to the
dollar, U.S. authorities join the BOJ in June, spending $833
million buying yen.
April 1994-August 1995 - Dollar sinks to a record low
against the German mark and a post-World-War Two low against the
yen. From April 1994, the United States intervenes repeatedly,
often with Japanese and European central banks, to prop up the
1991-1992 - U.S. and European central banks intervene
repeatedly after the Gulf War tips the U.S. economy into
recession. Washington intervenes on both sides of the market,
buying and selling dollars.
1988-1990 - The dollar is back on the march again, and the
United States intervenes after G7 statements on importance of
maintaining exchange rate stability.
Feb. 22, 1987 - G7 meet in Paris to halt a steep decline in
the dollar's value in what becomes known as the "Louvre Accord".
This comes only 17 months after the "Plaza Accord" that
successfully brought an end to the dollar's surge in the early
1980s. Louvre does not trigger a rebound, but does herald
several years of general stability, certainly relative to the
inflation-busting and growth-fired period under then-president
Ronald Reagan and Federal Reserve chairman Paul Volcker.
September 1985 - The G5 (Italy and Canada don't take part)
meet in New York's Plaza Hotel to discuss the dollar's 80
percent surge under Reagan and Volcker. The rare agreement to
bring the dollar down will become known as the "Plaza Accord".
It works too - the dollar, already on the slide, falls 40
percent over the next year and a half.
1976 - Canada joins, making it the G7.
1975 - Italy joins, making it the G6. Finance ministers and
central bank governors from these countries meet just outside
Paris to discuss "current world issues in a frank and informal
1974 - Senior finance officials from the United States,
United Kingdom, France, West Germany and Japan meet informally
for the first time under the guise of the "Group of Five", or
(Compiled by Jamie McGeever; Editing by Pritha Sarkar)