G-20 leaders promise tighter regulations
Published On Friday September 25, 2009
PITTSBURGH (AP) -- World leaders took credit Friday for pulling the economy
"back from the brink," and promised a new world order of tighter financial
regulation and more inclusive global governance to protect the world from
future meltdowns.
Turning from the crisis-management of previous summits, the Group of 20 leaders
pledged to set up more rigorous financial rules that would cut down on some of
the risky behavior and excesses that have been blamed for rocking the global
economy. And they vowed better coordination over economic policies.
"Going forward, we cannot tolerate the same old boom-and-bust economy of the
past," President Barack Obama said, speaking as the summit in Pittsburgh ended.
"We can't grow complacent. We can't wait for a crisis to cooperate."
Obama said actions taken so far "brought the global economy back from the
brink."
They agreed to require members to subject their economic policies to the
scrutiny of a peer review process that would determine whether they were
"collectively consistent" with sustainable global growth. They promised tighter
and more coordinated financial regulation.
However, the G-20 pledges lacked on details, and did not say, for instance, how
the proposed peer review process would be enforced.
In the first international summit hosted by Obama, the G-20 turned on greedy
bankers, agreeing on measure to curbs their bonuses in a bid to encourage more
responsible behavior.
According to the new agreement, bankers would only get part of their bonuses
upfront, while the rest would be dependent on the long-term financial
performance of the firm
EU leaders had called for links between bankers' pay and the companies'
long-term performance and have sought to end bonuses. Sarkozy in particular has
lobbied for better financial regulation, warning that the world risked another
speculative bubble "which when it bursts would put our economies on the edge of
the abyss."
Summit leaders also agreed to a bid proposed by Obama to reduce government
subsidies for fossil fuels such as oil and coal linked to global warming. If
fully implemented, the move would phase out $300 billion in global subsidies,
the U.S. president said.
"All nations have a responsibility to face this challenge," Obama said.
