BUSAN, South Korea – BUSAN, South Korea (AP) — World financial leaders pledged Saturday to push ahead on curbing deficits and crafting financial reforms to safeguard the global recovery, including making banks bear much of the burden for government bailouts.
As expected, the finance ministers and central banks gathered in this southern port city finessed what some said were at times heated differences over how to reshape financial regulation and build safety nets for countries stricken by debt crises.
The Group of 20 welcomed measures taken by the European Union, the European Central Bank and the IMF, including a $1 trillion bailout, to help countries cope with the fallout from unsustainably high debt.
"All of us have a strong interest in seeing those programs succeed in restoring confidence," U.S. Treasury Secretary Timothy Geithner told reporters after the meetings ended.
Long-term, sustainable growth will depend on rebalancing growth, he said.
"The United States is moving aggressively to fix things we got wrong and to strengthen our economic fundamentals," Geithner said, noting that as Americans boost savings and investment and consume less, other countries will need to generate more growth.
"All the countries recognize the basic reality that the U.S. is reforming and adjusting and that for the world to grow at its potential it is going to require that growth outside the U.S. will come more from domestic demand than in the past," he said.
Europe's sovereign debt crisis — and Hungary's warning this week that it risks a Greek-style meltdown of its own — sharpened worries that the global economy could succumb to another downturn following the one sparked by the collapse of U.S. investment bank Lehman Brothers in 2008.
The precarious levels of indebtedness among many countries also has driven home the need to restore what in G-20 speak is called "fiscal sustainability," participants said.
"There is a significant change of tone in the language that the G-20 use on the issue of fiscal sustainability and there is a very explicit reference in the communique to those countries with serious fiscal challenges needing to accelerate the pace of consolidation," said British Chancellor George Osborne.
While the euro fell below $1.20 for the first time in more than four years Friday in reaction to Hungary's woes, European officials insisted the problem was being overstated.
"Hungary has made serious progress in consolidating its public finances over the last couple of years," Olli Rehn, Europe's commissioner for economic and monetary affairs, told reporters. Any talk of a risk of default "is widely exaggerated," he said.
Despite qualms over the long-term prospects for European currency unity, ECB President Jean-Claude Trichet defended the euro, calling it a "solid currency, a credible currency, a currency that has kept its value in terms of price stability."
In the wake of the global recession, the G-20, which includes both advanced and emerging economies, has taken over from the Group of Seven industrialized nations as a key priorities-setting group for the global economy.
The finance ministers are working on reforms of financial regulations to help prevent the kinds of financial meltdowns that contributed to the recession, the worst global slump since World War II.
While there seems to be strong consensus on the broad strokes of what needs to be done, the difficulty is in technical details for reforming financial regulations, including how banks and other financial institutions might bear the burden for government bailouts and other interventions.
The communique issued Saturday did not include any reference to a proposed universal tax on banks to help pay for bailouts, instead saying there was a "range of policy options" to help protect taxpayers.
"It was apparent that most G-20 members do not support the concept of a universal levy," said Canadian Finance Minister Jim Flaherty, whose government opposes it on the grounds its banks had not needed government intervention during the recent crises.
Geithner said the group was ready to move ahead on stronger capital reserve requirements for banks and limits on indebtedness to help banks and other financial institutions weather future crises.
"We will expedite development of new rules while setting a transition period," he said. "Reducing uncertainty about the ultimate shape of these new rules will help minimize financial headwinds for recovery."
The group discussed China's currency, but only in the context of the need — acknowledged by Beijing — to help rebalance its economy toward greater reliance on domestic demand.
The U.S. has urged China to move faster in loosening controls that keep the yuan tethered to the U.S. dollar, and thus undervalued, aiding its exporters in overseas markets.
Associated Press writers Kelly Olsen and Sangwon Yoon contributed to this report.