As they wrestle with the worst financial crisis in the past 70 years, the leaders of the world’s 20 key economies agreed to set up a special Financial Stability Board, Dnevnik reported on April 3 2009.

The London summit saw the countries’ top officials reach a consensus on April 2 2009 for the first time to eradicate the shadow banking system, watch over hedge funds and the riskiest markets, control credit rating agencies, adopt new international accounting standards and a mechanism to provide early warning of macroeconomic and financial risks.

The heightened oversight over financial institutions involves also taking decisive action against non-cooperative jurisdictions, including tax havens.

The era of banking secrecy must end, said British prime minister Gordon Brown, who hosted the summit.

Leaders compiled a set of six principles, including the fight against protectionism, that should lead to the recovery of the global economic growth and commerce and create jobs.

The final declaration of the summit unveiled an unprecedented $5 trillion to be spent on measures to promote growth over the 20 months ahead and set a target for a four per cent increase in global industrial output by the end of 2010.

A portion of the funding will be channeled to the switch to a green economy. The International Monetary Fund (IMF) and the World Bank were assigned a key role by increasing available funding by a total of $1.25 trillion to ease the strains of struggling countries, Dnevnik reported.

The agreements and conclusions were issued in a post-G20 summit communique.

US president Barack Obama described the G20 agreements as a "turning point in our pursuit of global economic recovery," and that the measures to be taken amounted to "unprecedented steps to restore growth and prevent a crisis like this from happening again."

The leaders agreed to build a "clearer financial market architecture," said German chancellor Angela Merkel, after warning on April 1 that differences between participants run deep.

French president Nicolas Sarkozy said the results were "beyond his expectations". Ahead of the summit, it was reported that he had threatened to walk out should the G20 meeting fail to go far enough in its plan. Welcoming the agreement of global financial oversight, Sarkozy said: "We would never have hoped to get so much. This is not the victory of one camp against the other, but shows the growing awareness that the world needs to change".

Brown said that it had been agreed at the G20 meeting that leaders of emerging powers should be given a greater say in the world economy.

South African president Kgalema Motlanthe, head of state of the only African country in the G20, was reserved in his remarks, saying: "We are all concerned that the bottom of this crisis is not visible yet, and therefore are aware of the fact that these decisive and courageous that have been taken to stem the freefall may not be adequate to address the full extent of this crisis".

The leaders of the G20 – made up of Australia, Argentina, Brazil, Britain, Canada, China, Chile, France, Germany, India, Indonesia, Italy, Japan, Russia, South Africa, South Korea, Saudi Arabia, Turkey, the United States plus the European Union –  are expected to reunite later this year.

Media reports said the follow-up meeting would be in September, initial reports saying that the gathering would be in Japan while later reports said that it would take place at United Nations headquarters in New York.

Global markets rallied after the news of the G20 deal, the BBC said. London's FTSE 100 index closed up 4.3 per cent, Germany's Dax index gained 6.1 per cent while France's Cac 40 rose 5.4 per cent.

US markets also took heart as the global efforts unveiled added to optimism that the worst might be over for the world economy. In New York, the Dow Jones rose 2.8 per cent, or 216.5 points, to 7978 points.

In a statement issued in Berlin, Transparency International (TI) said that it welcomed the G20 decision to prioritise transparency as a means to curb systemic risks in the global
financial and economic system and to provide a stimulus that also extends to the developing world.
 
"Agreeing to tackle opacity and to establish a new global governance body in the form of the Financial Stability Board announced today, is the kind of decisive
action that we expected from this summit," TI chairperson Huguette Labelle said.

"In the long term, however, the G20's initial steps towards transparency must be taken beyond the corridors of power and properly implemented, with input from civil society," Labelle said.