Scepticism over G20 pledge of new era

Published: September 25 2009 06:24 | Last updated: September 26 2009 00:51

World leaders promised a new era of economic co-operation at the close of the G20 summit in Pittsburgh on Friday, endorsing new guidelines for bankers’ pay, a tight timetable for regulatory reform and a new framework for balanced growth.

But little progress was made on trade or climate change and many experts expressed doubt that the accord on growth would actually result in policy changes by leading nations.


“There is no longer an Anglo-Saxon world and a European world,” said Nicolas Sarkozy, the French president, highlighting US agreement to implement the Basel II capital accord and a crackdown on tax havens.

European nations agreed to support some form of bank leverage ratio – a key US demand.

President Barack Obama said the summit laid the ground for an era of co-operation. “We’ve brought the global economy back from the brink,” he said.

Mr Obama linked the summit’s declaration with the prosperity of ordinary Americans. “We need to act together to make sure our recovery creates new jobs and industries, while preventing the kinds of imbalances and abuse that led us into this crisis.”

The G20 did not endorse a cap on bonus payments but established guidelines requiring a large proportion to be paid in deferred compensation.

The G20 pledged to shift at least 5 per cent of the shares in the IMF to emerging economies from over-represented nations, and transfer at least 3 per cent vote share in the World Bank.

“The commitment on bonuses will bring an end to the unacceptable and disgraced old system,” said Gordon Brown, the UK prime minister.