Update on G20 progress yesterday

Here’s a summary of some of the key G20 outomes, agreed yesterday. The meeting of finance ministers was ahead of this month’s Pittsburgh Summit. Yesterday, Alistair Darling brokered agreement to tough global rules on pay, and ordered the Financial Stability Board to thrash out how the rules will be implemented ahead of the Pittsburgh Summit at the end of the month, around four principles; o Greater disclosure and transparency o Deferral, clawback of bonuses to ensure no rewards for failure o Stronger corporate governance – including more independent remuneration committees o Exploring possible limits on total remuneration in a way that actually works internationally (so one country isn’t played off against another)

These rules are part of wider reform of financial regulation, where G20, led by US and UK, stepped up the pressure on the Basel Committee – the global body responsible for capital rules – to quickly deliver: o More stringent capital requirements designed to rein in reckless risk taking: more and better capital; countercyclical requirements; leverage ratio added to Basel framework; minimum high quality liquidity standards o Living wills and cross-border resolution regime

Against the backdrop of signs that the global economy is improving as a result of the concerted international action agreed at the London Summit, Finance Ministers also agreed that the greatest risk to recovery would be to think that the job is done and that sanctions should be taken against tax havens that don’t come into line by March 2010 – delivering on London Summit’s commitment to end tax secrecy for good.

And, as part of the implementation of the agreement reached in London in April 2009, and ahead of the Pittsburgh Summit and IMF Meetings in early October, Ministers also announced that commitments to deliver an additional $850 billion to the IMF and World Bank were almost complete and looked forward to substantial progress at Pittsburgh on an increase in voice and representation for emerging and developing economies in the IMF and World Bank.