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G20 leaders seal $1tn global deal G20 leaders seal $1tn global deal
(10 minutes later)
Leaders of the world's largest economies have reached an agreement to tackle the global financial crisis with measures worth $1 trillion (£681bn).Leaders of the world's largest economies have reached an agreement to tackle the global financial crisis with measures worth $1 trillion (£681bn).
To help countries with troubled economies, the International Monetary Fund (IMF) will get extra resources worth up to $750bn.To help countries with troubled economies, the International Monetary Fund (IMF) will get extra resources worth up to $750bn.
There will also be sanctions against secretive tax havens and tougher global financial regulation.There will also be sanctions against secretive tax havens and tougher global financial regulation.
And the G20 has committed about $250bn to boost global trade.And the G20 has committed about $250bn to boost global trade.
The deal was announced shortly before the European stock markets closed and gave leading indexes a significant boost.The deal was announced shortly before the European stock markets closed and gave leading indexes a significant boost.
London's FTSE 100 index of leading shares ended 4.3% higher. In Paris, the Cac 40 jumped 5.4% and in Frankfurt the Dax rose 6%.London's FTSE 100 index of leading shares ended 4.3% higher. In Paris, the Cac 40 jumped 5.4% and in Frankfurt the Dax rose 6%.
The dealThe deal
NEW FUNDING PLEDGES $500bn for the IMF to lend to struggling economies$250bn to boost world trade$250bn for a new IMF "overdraft facility" countries can draw on$100bn that international development banks can lend to poorest countries$6bn increase in lending for the poorest countries. Source: BBC G20 leaders' statement Global markets rise on G20 deal Historic IMF changes Q&A: The G20's $1tn deal
On behalf of the G20, Prime Minister Gordon Brown announced the following steps:On behalf of the G20, Prime Minister Gordon Brown announced the following steps:
  • Bankers' pay and bonuses will be subject to stricter controls
  • A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders and provide an early warning mechanism for the financial system
  • There will be greater regulation of hedge funds and credit ratings agencies
  • A common approach to cleaning up banks' toxic assets has been agreed
  • The world's poorest countries will receive $100bn extra aid
  • G20 countries are already implementing the biggest economic stimulus "the world has ever seen" - an injection of $5tn by the end of next year.
  • Bankers' pay and bonuses will be subject to stricter controls
  • A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders and provide an early warning mechanism for the financial system
  • There will be greater regulation of hedge funds and credit ratings agencies
  • A common approach to cleaning up banks' toxic assets has been agreed
  • The world's poorest countries will receive $100bn extra aid
  • G20 countries are already implementing the biggest economic stimulus "the world has ever seen" - an injection of $5tn by the end of next year.
IMF boostIMF boost
The IMF has been one of the biggest beneficiaries of the G20 summit.The IMF has been one of the biggest beneficiaries of the G20 summit.
The resources it has to help troubled economies will be increased to $500bn.The resources it has to help troubled economies will be increased to $500bn.
An overdraft facility will also be increased to $250bn (in the IMF's currency, so-called Special Drawing Rights) that all members can call upon.An overdraft facility will also be increased to $250bn (in the IMF's currency, so-called Special Drawing Rights) that all members can call upon.
"This is the day that the world came together to fight back against the global recession, not with words, but with a plan for global recovery and for reform and with a clear timetable for its delivery," Mr Brown said."This is the day that the world came together to fight back against the global recession, not with words, but with a plan for global recovery and for reform and with a clear timetable for its delivery," Mr Brown said.
NEW FUNDING PLEDGES $500bn for the IMF to lend to struggling economies$250bn to boost world trade$250bn for a new IMF "overdraft facility" countries can draw on$100bn that international development banks can lend to poorest countries$6bn increase in lending for the poorest countries. Source: BBC
He said there was "no quick fix" for the world economy but there was a commitment to do whatever was necessary.He said there was "no quick fix" for the world economy but there was a commitment to do whatever was necessary.
Mr Brown said the Organisation of Economic Co-operation and Development would publish a list of tax havens later on Thursday and actions would be taken against those that did not comply with international rules.Mr Brown said the Organisation of Economic Co-operation and Development would publish a list of tax havens later on Thursday and actions would be taken against those that did not comply with international rules.
"We have agreed tough standards and sanctions for use against those who don't come into line in the future," he said."We have agreed tough standards and sanctions for use against those who don't come into line in the future," he said.
Another G20 summit will be held later this year to check on progress.Another G20 summit will be held later this year to check on progress.
Hopes met?Hopes met?
French President Nicolas Sarkozy said that the conclusions of the G20 summit were "more than we could have hoped for".French President Nicolas Sarkozy said that the conclusions of the G20 summit were "more than we could have hoped for".
HAVE YOUR SAY1.1 trillion...how can that ever be accounted for? Success for them. Failure for everyone elseNathan McConnell, Grantsburg, US Send us your comments HAVE YOUR SAY1.1 trillion...how can that ever be accounted for? Success for them. Failure for everyone elseNathan McConnell, Grantsburg, US Send us your comments
Earlier, there had been suggestions of rifts between France and Germany and the US and the UK.Earlier, there had been suggestions of rifts between France and Germany and the US and the UK.
The US and UK emphasised the need for public spending to ease the crisis while France and Germany were keen for tougher financial regulation.The US and UK emphasised the need for public spending to ease the crisis while France and Germany were keen for tougher financial regulation.
Mr Sarkozy had threatened to walk out of the meeting if it did not yield concrete results.Mr Sarkozy had threatened to walk out of the meeting if it did not yield concrete results.
German Chancellor Angela Merkel also praised the outcome.German Chancellor Angela Merkel also praised the outcome.
She said the new measures would give the world a "clearer financial market architecture" and the agreement was "a very, very good, almost historic compromise".She said the new measures would give the world a "clearer financial market architecture" and the agreement was "a very, very good, almost historic compromise".
Her finance minister, Peer Steinbrueck, said he was pleased that the G20 statement did not oblige states to launch further economic stimulus packages.Her finance minister, Peer Steinbrueck, said he was pleased that the G20 statement did not oblige states to launch further economic stimulus packages.