G20 Closer To Limits On Bank Risk, Pay

President Barack Obama, followed by British PM Gordon Brown, center, and French President Nicolas Sarkozy, during the G20 Summit in Pittsburgh, 25 Sep 2009Leaders from the world's leading and developing economies are movingcloser to an agreement on one of the most contentious issues to comeout of the global financial crisis.

Officials at the Group of 20summit in the eastern U.S. city of Pittsburgh say leaders are workingout the final details of a deal to limit risk-taking by large banks andcontrol pay for their executives.

Some economists and officialsblame banks for plunging the global economy into a deep recession,while some countries, including France and Germany, have expressedoutrage at the large bonuses paid to the top executives at failedfinancial firms.

G20 officials say the deal will require banksto hold more cash in reserve in case their investments go bad. It willalso require that salaries for top executives be tied to the bank'sperformance while allowing some pay to be confiscated if banks losemoney.

The officials say the final agreement will not impose ahard cap on executive compensation. U.S. officials have said such arequirement would be a deal-breaker.

G20 countries have alsodiffered on the precise focus of this summit, with German ChancellorAngela Merkel pushing for the focus to remain on overhauling the waythe world regulates the financial markets.

But U.S. TreasurySecretary Timothy Geithner said Thursday that there was "strongconsensus" on the need to rebalance global trade.  

Geithner hassaid countries will not be able to successfully recover from therecession if they focus on selling goods to other countries, ratherthan on growing their domestic economies.

On Thursday the White House said the G20 will become the world's dominant global economic forum.  

TheGroup of Eight major industrialized nations had been considered theworld's leading economic group. The White House says the decision tofocus more on the G-20 brings to the table the countries needed tobuild a stronger, more balanced global economy.

The G20 includes members of the G8, along with 11 major emerging economies and the European Union.  

Asthe summit leaders were gathering Thursday, riot police fired teargasand pepper spray and set off high-pitched sirens to break up what theysay was an unauthorized protest against the economic summit.

G20members are the United States, Brazil, China, Indonesia, Mexico,France, Germany, the European Union, Argentina, Australia, Britain,Canada, India, Italy, Japan, Russia, Saudi Arabia, South Africa, SouthKorea, and Turkey.


Some information for this report was provided by Reuters.