LONDON — World leaders pledged $1.1 trillion in loans and guarantees to impoverished countries and agreed today to crack down on tax havens and hedge funds but failed to reach sweeping accord on stimulus spending that would directly attack the global economic decline.
In a communique capping a dramatic one-day gathering, the leaders of the Group of 20 nations announced the creation of a supervisory body to flag problems in the global financial system. They did not, however, satisfy U.S. and British calls for new stimulus measures.
They did 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’s gathering was called in hopes of restoring faith in the global financial system — and in one possible gauge of success, European and U.S. markets surged ahead as the outcome of the summit came into view.
“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 G-20 summit.
German Chancellor Angela Merkel called the measures “a very, very good, almost historic compromise” that will give the world “a clear financial markets architecture.”
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 and other global institutions was unprecedented.
The money included $300 million over three years for multi-country development banks to lend to poor countries that have seen credit from crisis-hit banks dry up.
The G-20 leaders also said that developing nations — hard-hit and long complaining of marginalization — a greater say in world economic affairs. They said they would 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. (AP)
