By Arun Kumar, IANS,
Pittsburgh : Leaders of G-20 nations have agreed to keep working to stimulate economies and stabilise financial systems following the worst financial crisis in decades as they decided to designate the group as the premier forum for international economic cooperation.
The decision to replace G-8, once elite club of rich industrial nations, with G-20 reflecting the growing economic clout of India, China, Brazil, and other fast-growing developing countries, came at the end of a two day summit of the world’s 20 major economies.
“This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest,” according to a White House press release.
The group representing 90 percent of the world’s economic output — also committed Friday to a timeline to establish and enforce new rules aimed at spurring financial firms around the globe to improve capital cushions and avoid taking risk.
“We brought the global economy back from the brink, we laid the groundwork today for longtime prosperity as well,” President Obama said at a press conference after the summit concluded. “Still we know there is much further to go.”
The Pittsburgh summit was the third G-20 summit in less than a year, and leaders agreed to work together more closely toward sustained growth and cracking down on banking regulations.
By the end of 2010, the nations would agree on rules aimed at improving “quantity and quality” of bank capital and discouraging excessive risk-taking. They also set a goal to start enforcing those rules by the end of 2010.
The G-20 leaders’ statement did not detail how the nations would enforce those rules.
In a related measure, the leaders also agreed to set new executive compensation standards that would avoid risky-taking, like “avoiding” multi-year guaranteed bonuses and requiring stronger disclosure for compensation policies.
The leaders asked firms to start putting into place such compensation suggestions, but didn’t lay out a method for enforcing them. They also asked a G-20 advisory board to suggest more executive pay measures by next March.
Earlier, addressing the plenary session of the summit, Prime Minister Manmohan Singh said the time was not ripe yet to withdraw the stimulus packages, while raising India’s concern over protectionism.
The current global financial crisis required tackling the problems at the root to restore normalcy in the global economy, he said.
“This requires a commitment that we will not undertake any premature withdrawal of stimulus. We must certainly plan for an orderly exit when the time is right. But that time is not now,” the prime minister said.