G20 nations tentatively agree to limit bankers' bonuses
Protesters demonstrate as group meets to discuss economic issues
Last Updated: Thursday, September 24, 2009 | 11:03 PM ET
CBC News
Law enforcement personnel patrol near the site of the G20 Pittsburgh summit. (Eric Thayer/Reuters) The members of the G20 have reached a preliminary deal on limiting the bonuses bankers get, U.S. Treasury Secretary Tim Geithner said Thursday.
Geithner's comment came as the leaders of the G20 group of nations, the world's largest economies, met in Pittsburgh.
Each country will be responsible for setting its own standards on executive pay, Geithner said, but the process will be overseen by the newly formed Financial Stability Board. The board includes members of all the G20 countries.
The plan is expected to be formally approved on Friday.
Canadian officials expect the changes will link bonuses to long-term performance, while allowing any payments to be clawed back any year when the company does poorly. They also said banks will be required to have more money on hand to balance loans.
A primary goal of the Pittsburgh summit is to come up with a common approach to economic recovery, in particular, an exit strategy that enables governments to withdraw from stimulus programs without driving the global economy back into a recession.
The meetings include leaders from some fast-growing developing countries, such as China, India and Brazil.
To highlight the growing importance of those countries, U.S. officials said late Thursday that the G20 will assume the role of a permanent council on global economic co-operation, a role previously held by the smaller G8.
U.S. President Barack Obama was to announce the move on Friday.
Prime Minister Stephen Harper announced Thursday that Canada would make $2.8 billion temporarily available to the African Development Bank to boost its lending capacity.
The G20 leaders had a working dinner at the Pittsburgh Phipps Conservatory and Botanical Gardens on Thursday night. Friday will focus on group sessions and a news conference.
Prime Minister Stephen Harper and his wife, Laureen, wave as they arrive at Pittsburgh International Airport on Thursday. (Keith Srakocic/Associated Press) Discussions at the summit are expected to include overhauling financial regulation and plotting a future course for sustainable growth.
The gathering follows G20 meetings in April in London and last November in Washington. At the April meeting, leaders agreed to inject $1 trillion US in stimulus spending into the world economy.
Analysts have said this G20 meeting is unlikely to end with a treaty-like consensus or trillion-dollar announcements.
The global economic recovery has been fragile and it's important that G20 countries continue with their stimulus packages and economic reform, Prime Minister Harper has said.
"I don't think we can say the recession is over," he said.
British Prime Minister Gordon Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel will also be urging the G20 to stick to stimulus plans while avoiding excessive budget deficits and other actions that could destabilize the global economy in the future.
Trade deficits
Demonstrators at the G20 summit in Pittsburgh on Thursday wear masks of world leaders during a protest calling for urgent action on global poverty. (Carlos Barria/Reuters) The U.S. administration will be pushing leaders to agree "on a framework for balanced and sustainable growth, a set of policies, parameters and process" that prevent the kind of imbalances that contributed to the global financial meltdown, said Mike Froman, a top economic adviser to Obama.
Obama wants the G20 to agree to a new global framework that would require countries to radically change how they manage their economies and restrain dangerous imbalances that range from massive trade surpluses in countries like China, Japan and Germany, to massive trade deficits in countries like the U.S.
Many economists believe that such imbalances helped bring about the world's economic crisis. However, China is resisting the rebalancing plan, fearing it could be used to attack its trade surplus.
Security tight
Pittsburgh was in a state of virtual lockdown as the two-day summit started.
Security officials were tightly patrolling the city. The security presence was visible because of the thousands of protesters expected to stage demonstrations in the downtown core, Pittsburgh police spokeswoman Diane Richard said.
Police said 14 members of the environmental group Greenpeace were arrested on two bridges early Thursday. They faced various charges, including possession of an instrument of a crime, disorderly conduct, conspiracy and obstruction.
Later Thursday afternoon, police ordered several hundred protesters marching toward the summit headquarters to halt because the march was not sanctioned by the city. Police declared the demonstration an unlawful assembly.
In response, protesters began rolling trash bins toward police, and officers then fired tear gas. Some protesters also used pallets and corrugated steel to block a road. Protesters exposed to the tear gas were coughing and complaining of watering eyes and stinging.
With files from The Associated Press
