LONDON — Top finance officials from rich and developing countries agreed Saturday to curb bankers’ bonuses, but the proposed crackdown falls short of European demands after the U.S. and Britain shied away from imposing a cap.
The Group of 20 finance ministers pledged to maintain stimulus measures such as extra government spending and low interest rates to boost the global economy, warning that the fledgling recovery is not assured.
“The financial system is showing signs of repair,” said U.S. Treasury Secretary Timothy Geithner. “Growth is now underway. However, we still face significant challenges ahead.”
The G20 joint statement issued at the meeting’s end said that fiscal and monetary policy will stay “expansionary” for as long as needed to reduce chances of a double-dip recession.
The International Monetary Fund has said that the global economy is beginning a sluggish recovery from its worst recession since World War II, raising its estimate for global economic growth in 2010 to 2.5 percent, from an April projection of 1.9 percent.
But the IMF also downgraded its forecast for this year, saying it would shrink by 1.4 percent, instead of 1.3 percent.
But while the gathering — a preparatory session for the G20 leaders’ summit in Pittsburgh this month — reached agreement on the need for ongoing growth-boosting measures and some regulatory reform, it compromised on the hot topic of bankers’ bonuses.
The Financial Stability Board was assigned to draw up proposals for the Sept. 24-25 meeting in Pittsburgh.
Suggested measures that countries could take included proposed clawback mechanisms to ensure that bonuses are linked to the long-term success of deals and could be forfeited if they fail to deliver.
