PITTSBURGH — As leaders of the world’s most developed nations inched closer to consensus Thursday on how best to restrict compensation packages for financial executives, masked protesters and police in armored vehicles clashed in what’s become a familiar ritual at such meetings.
In a chaotic scene near downtown Pittsburgh, police in riot gear quashed an unauthorized march by an estimated 2,000 protesters, some clad in black and carrying posters with anarchist symbols. Police responded with tear gas and arrests. However, the streets around the meeting site were well secured and generally peaceful.
President Barack Obama arrived Thursday afternoon for the start of a two-day summit of the Group of 20 leaders. It marks the third time this year that the leaders of the most developed nations have gathered to take stock of what now appears to be a waning global financial crisis.
By the meeting’s adjournment today, the leaders expect to mutually commit to major changes in financial regulation and to adopt a common approach preventing the outsized executive bonuses and other forms of compensation for bank chief executives, received in spite of the near collapse of the financial system last year.
The U.S. appeared late Thursday to have defeated efforts to impose hard and fast caps on executive compensation — a position championed by France. Instead, the G20 leaders appear ready to embrace standards for pay that more closely link compensation to performance.
Adding to outrage over bank pay, the New York Post reported this week that Goldman Sachs, which earlier this year repaid $10 billion in taxpayer bailout funds, expects to have a bonus pool this year approaching $16 billion.
Representatives of the U.S., the European Union and 18 other nations also are expected to call on nations to try to harmonize “rules of the road” for finance so that banks and other financial firms can’t avoid regulation.
“We need to see competition for stronger standards, not weaker standards,” Treasury Secretary Timothy Geithner said in a Pittsburgh news conference.
Added White House spokesman Robert Gibbs: “We do know that unless we all have greater rules for the road, money can fly and transfer anywhere. So if there are weaker rules in one place, but everybody else is taking concerted efforts, you don’t have a defense . . . because money can always go to a place very quickly.”
There were plenty of other flashpoints as the meeting got underway.
Several European nations are upset about a proposal from Geithner that would give developing nations a greater say in global financial institutions such as the World Bank and International Monetary Fund.
Geithner wants to transfer another 5 percent of voting shares in the IMF to developing nations such as China, India and Brazil, to reflect their growing importance in the global economy. Europe isn’t opposed per se, but European leaders don’t want this greater influence to come in the form of reducing voting powers for developed nations.
G20 leaders also are congratulating themselves for preventing a recurrence of the Great Depression through jointly orchestrated policy steps.
“Over the past year, we faced the test of an economic crisis which threatened to send our economies into free fall. And we took swift and effective action to avert that disaster,” Jose Manuel Barroso, the president of the European Commission, said in a speech Thursday at the University of Pittsburgh.
The new challenge is pulling back.
“Now we face a different test,” Barroso said. “Have we learned the lessons of the past year? Are we ready to apply them to the phase of stabilization, to develop the right exit strategies, and to find the sources of growth we need for the future?”
Meanwhile, Pittsburgh was secured by road barricades and a heavy police presence. Many residents who could telecommute did. Some businesses were closed. Schoolchildren planned to stay home today.
Besides those protesting the economic summit were opponents of abortion, supporters of Tibet and a group of teenagers with a sign that said: “Smoke weed every day.”
