The leaders of the world's wealthiest nations and key emergingeconomies are in Pittsburgh, assessing efforts to fight the recession,and seeking ways to prevent future financial problems. A key U.S. official says the G20 leaders are close toa consensus on the crucial task of reforming financial regulations.

Timothy Geithner briefs reports before the start of the the G20 summit, in Pittsburgh, 24 Sep 2009U.S.Treasury Secretary Timothy Geithner says it is urgent to fix the flawedfinancial system while the pain of the down turn is still fresh ineveryone's mind.

"We are not going to walk away from thegreatest economic crisis since the great depression and leaveunchanged, leave in place the tragic vulnerabilities that caused thiscrisis," he said.

Geithner told journalists that the progresson financial reform includes the contentious issue of the huge bonusespaid to bankers.

German and French officials argue thesebonuses prompted bankers to take reckless risks in pursuit ofshort-term profits. Those profits turned to massive losses in somecases, threatening to bring down the financial system.

LeslieGelb of the Council on Foreign Relations says public anger at thebankers strengthens the hand of those arguing for tougher regulation.

"Therecent experience with financial greed and irresponsibility will pushthe center of gravity in this debate more toward regulation," saidGelb. "The fact is that regulators should have caught what these bankswere doing."

But U.S. officials say a better way to preventeconomic problems is to require banks to keep larger reserves to coverlosses from bad loans or failed investments.

The secretary-general of the Organization for Economic Cooperation and Development, Angel Gurria, agrees.

"Strengtheningthe banks capital," said Gurria. "The story of the banks is capital,capital, capital, that is the big solution."

Besidesstrengthening banks and regulation, many G20 nations have been tryingto strengthen their economies by spending huge sums building roads,bridges and other public works projects. They also slashed interestrates to historic lows.

At the Pittsburgh meeting, leaders are trying to figure out when they should cut back these stimulus efforts.

Thehead of the International Monetary Fund Dominique Strauss-Kahn, saysnot quite yet. "It is not the time for advanced economies to organizean exit strategy. We have to think about it, but not implement it now,"he said.

Economists say if the stimulus programs end too soonthe economy could relapse into recession. But if these expensive publicworks programs go on too long, they push nations deeper into debt,while low interest rates eventually raise the risk of inflation.

Large trade imbalances are another issue under discussion here.

Chinafor example sells more than it buys on international markets, while theUnited States is in the opposite position, running up a huge tradedeficit.

Some economists say this is one of the economic imbalances that contributed to the recession.

Secretary Geithner says the recession is forcing American consumers to cut their spending.

"Fortoo long, Americans were buying too much, and saving too little … thatis no longer an option for us or for the rest of the world," he said.

Geithnersays major exporters will have to look elsewhere for markets for theirproducts, perhaps boosting demand in their own nations.