Updated April 02, 2009
G-20 Leaders to Give $1 Trillion to IMF, World Bank
, AP
In a communique capping a dramatic one-day gathering, the leaders announced the creation of a supervisory body to flag problems in the global financial system -- but did not satisfy calls for new stimulus measures.
LONDON -- G-20 leaders hoping to end the global economic crisis pledged an additional $1.1 trillion in financing Thursday to the International Monetary Fund and other global institutions and declared a crackdown on tax havens and hedge funds.
In a communique capping a dramatic one-day gathering, the leaders announced the creation of a supervisory body to flag problems in the global financial system -- but did not satisfy calls for new stimulus measures.
They did, however, bridge the gap between the United States and some European nations over how far to regulate the market and curb the excesses that sparked the global economic crisis.
"Today the largest countries of the world have agreed on a global plan for economic recovery and reform," said the host, British Prime Minister Gordon Brown. His announcement was quickly followed by similar ones by the French and German leaders, who supported the results of the summit.
French President Nicolas Sarkozy, who earlier had threatened earlier to walk out if unsatisfied with the outcome, also praised President Barack Obama for helping to create consensus and persuade China to agree to publish lists of tax havens.
"There were moments of tension," Sarkozy said. "Never would we have thought to get as big an agreement."
German Chancellor Angela Merkel called the measures "a very, very good, almost historic compromise" that will give the world "a clear financial markets architecture."
European and U.S. markets surged ahead Thursday as the outcome of the summit came into view.
While the leaders did not announce any new stimulus measures -- as some in the United States had hoped -- Brown said the $1 trillion deal to boost funds for the International Monetary Fund, World Bank and other global institutions was unprecedented.
"For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world's poorest," Brown said. "This is a collective action of people around the world working at their best."
The G-20 leaders also said that developing nations -- hard-hit and long complaining of marginalization -- would have a greater say in world economic affairs. They vowed to renounce protectionism and pledged $250 billion in trade finance over the next two years -- a key measure to help struggling developing countries.
The leaders also agreed to new rules on linking executive pay to performance, Brown said.
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