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G20 leaders promise tighter regulations

(Agencies)
Updated: 2009-09-26 14:13

Leaders also agreed to make banks increase their capital buffers when the economy has recovered enough to allow them to put money aside to cushion against future downturns - a measure pushed by the United States. Europeans worried about being at a disadvantage won a key concession by ensuring that differences in accounting standards and the extent of the bank's risky behaviors be considered when determining the size of the buffer.

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And, repeating pledges from G20 summits in November and April, when financial panic was rampant, they vowed anew to "reject protectionism in all its forms."

They failed to mention that previous pledges to avoid protectionism had been ignored by nearly all 20 members.

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 US president said.

"All nations have a responsibility to face this challenge," Obama said.

The final statement also said voting powers in the IMF "should reflect the relative weights of its members in the world economy, which have changed substantially in view of the strong growth in dynamic emerging market and developing countries."

Now, developed industrialized nations wield about 57 percent of the voting rights in the IMF to about 43 percent for developing nations. The G20 leaders called for shifting shares from developed powers to emerging ones by at least 5 percentage points. They called for a similar shift at the World Bank.

European countries, particularly France and Britain, have been resisting such changes, which would diminish their role.

The streets of Pittsburgh were generally calm, a day after police and protesters clashed. A few thousand demonstrators pledging nonviolence banged drums, danced and held signs advocating assorted causes. On Thursday, a march without a permit and other demonstrations ended with nearly 70 arrests.

South Korean President Myung-bak said his country will chair the G20 next year and will host the next summit in November 2010.

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