Group of 20 (G20) economic policy and financial reforms are essential at the Pittsburgh Summit in the face of continuing fragile global economic and financial conditions, the Institute of International Finance (IIF) said on Monday.

IIF, the global association of financial service firms with more than 375 member institutions in over 70 countries, called on US President Barack Obama and other G20 leaders to take the opportunity of the September 24-25 summit to sustain policies to consolidate economic recovery, articulate credible exit strategies and establish a senior-level task force with a central role for the IMF to address crucial issues of global imbalances.

"International coordination will be essential, given the global nature of financial markets, and national authorities should roll back uncoordinated emergency measures that have contributed to fragmentation of the global financial system," the IIF said.

In a letter to G20 leaders on behalf of the IIF, IIF Managing Director Charles Dallara said the organization fully recognized that establishing a more stable and efficient global financial system was a shared responsibility that demanded actions by the financial service industry itself.

The letter stressed the industry was keenly aware that weaknesses and failures in certain of its own business practices contributed to the crisis and that this was not a time for "business as usual."

G20 finance ministers and central bank governors who gathered in London earlier this month agreed that global economic and financial conditions remained fragile.

"Supportive policies should be kept in place until clearer signs of a rebound in underlying private demand emerge, accompanied by indications of an impending turnaround in bank credit flows and job markets, " Dallara said.

However, the IIF managing director added it was essential in the meantime to articulate credible strategies for shifting to a less accommodative monetary policy stance and phasing out liquidity support programs for medium term fiscal consolidation to rein in structural deficits and for an expeditious restoration of private ownership of financial firms that received capital from the state.

The IIF said avoiding future financial crises and promoting sustainable growth required a serious initiative to improve macroeconomic policy coordination among the world's major economies.

Governments and regulatory authorities had made important strides in outlining measures for the reform of financial sector regulation. However, the regulatory reforms to improve the resilience of the financial sector needed to avoid measures that would inhibit the effective functioning of markets and the revivalof domestic and cross-border credit flows, it added.

Despite the G20 commitment to global coordination at the London Summit in April, the strengthening of the global system was now being placed at risk as governments had been introducing financial regulatory measures with a decidedly national orientation and without close international coordination.

"We urge the G20 to call for concrete measures to reverse this negative dynamic, and to safeguard the prospects for globally integrated financial markets supporting an open and growing world economy," the letter said.

The IIF said only the G20 had the authority to mobilize coordinated action to address the challenge to global financial system.

"We would urge G20 leadership to commission a major effort to carry this forward, and the private sector stands ready to assist in such a crucial project," it said.

The organization also called on the Pittsburgh Summit to strengthen the architecture of the international financial system.

(Xinhua News Agency September 15, 2009)