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G20 leaders agree to $1tn fiscal stimulus

G20 leaders agreed to a $1tn fiscal package in a bid to stimulate global economic growth at the one-day summit yesterday.

Prime Minister Gordon Brown said that there were “no quick fixes” but said the decisions taken would begin the process to solve the economic crisis.

The leaders also agreed to reform the financial regulatory system to prevent a crisis of this scale from happening again.

Tax havens will be named and shamed if they are not transparent about the money they hold.

Banks will also face increasing checks against excessive lending to ensure there is no repeat of the crisis.

The leaders pledged to give regulators the power to collect relevant information about banks and to strengthen links between regulators from across the global in order to share information about multi-national financial institutions.

Hedge funds will also be brought into the regulatory system and bankers’ pay will reflect long-term performance.

US President Barack Obama was praised for helping to persuade China to agree to publish a list of tax havens.

The $1tn will be made available via the International Monetary Fund and will help countries that get into economic difficulties.

The IMF’s role has been increased and it will now take preventative action and monitor whether countries are doing enough to boost the world economy, as opposed to just being a last resort for countries facing bankruptcy.


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