Proper rules against risk-taking in the financial sector, including on the issue of bankers’ bonuses and high levels of compensation, are needed, Swedish prime minister Fredrik Reinfeldt, whose country currently holds the rotating presidency of the European Union, said at the G20 summit in Pittsburgh on September 25 2009.
 
At the same event, European Commission President Jose Barroso said: "this crisis is much more than a financial and economic crisis. It is also about how we live in our societies and the shared values that we should respect. We must learn our lessons from the crisis and draw up global rules that reflect the reality today, i.e. that our countries are dependent on one another."
 
Asked at a news conference what measures the EU wants to put in place to reduce banks’ high risk-taking, Reinfeldt and Barroso said that it was not a matter of stepping in and regulating for regulation’s sake, but because the market had developed in a direction that required clearer rules.
 
"I lead a government that believes in market economy and I am not calling for state-controlled businesses," Reinfeldt said.
 
"But we can see a clear new development that we must deal with because it harms our societies. When companies’ risk-taking leads to increased unemployment and it becomes the taxpayers’ job to cover the banks’ losses, then it is time for politicians to act and make clear that we cannot accept the situation.
 
"That is why we need proper rules against such risk-taking in the financial sector, including on the issue of bonuses and high levels of compensation," Reinfeldt said.
 
The BBC quoted US treasury secretary Timothy Geithner as saying that G20 countries had reached a consensus on the "basic outline" of a proposal to limit pay and bonuses by the end of 2009.
 
Each country would set their own standards, he said, but that these would be overseen by the G20's Financial Stability Board - made up of central bankers and regulators.
 
News agency Reuters, quoting a draft summit communiqué, said that the draft committed G20 leaders to implement new rules by the end of 2012 to improve the quality and amount of bank capital and discourage excessive leverage.
 
G20 finance ministers and central bank governors agreed at a meeting earlier in September 2009 not to start cutting back just yet on stimulus efforts, CNN said.

The finance and central bank chiefs fear that ending stimulus programmes would put economies at risk for plunging back into recession.

However, the economic outlook has improved enough that countries are being encouraged to start working on exit strategies, which will vary by nation.

The economic summit marks the third time in a year that the world's top industrial powers have gathered. They met in November in Washington and followed up with an April session in London.

Leaders of the G20 announced on September 25 that the group will become the new permanent council for international economic co-operation.

The BBC said that the change would give more power to emerging economies, rather than to the developed powerhouses of the G8 group.
 
EU officials also announced a deal to shift the balance of voting in the International Monetary Fund to benefit growing economies such as China. Currently, China wields 3.7 per cent of IMF votes compared with France's 4.9 per cent, although the Chinese economy is now 50 per cent larger than that of France.