BUSAN, South Korea — World financial leaders pledged Saturday to push ahead on curbing deficits and crafting financial reforms to safeguard the global recovery, including making banks bear much of the burden for government bailouts.
As expected, the finance ministers and central banks gathered in this southern port city finessed what some said were at times heated differences over how to reshape financial regulation and build safety nets for countries stricken by debt crises.
The Group of 20 welcomed measures taken by the European Union, the European Central Bank and the International Monetary Fund, including a $1 trillion bailout, to help countries cope with the fallout from unsustainably high debt.
“All of us have a strong interest in seeing those programs succeed in restoring confidence,” U.S. Treasury Secretary Timothy Geithner said after the meetings ended, adding that long-term, sustainable growth will depend on rebalancing growth.
“The United States is moving aggressively to fix things we got wrong and to strengthen our economic fundamentals,” Geithner said, noting that as Americans boost savings and investment and consume less, other countries will need to generate more growth.
Although there seems to be strong consensus on the broad strokes of what needs to be done to prevent another meltdown, the difficulty is in technical details for reforming financial regulations, including how banks and other financial institutions might bear the burden for government bailouts and other interventions.
The communique issued Saturday did not include any reference to a proposed universal tax on banks to help pay for bailouts, instead saying there was a “range of policy options” to help protect taxpayers.
“It was apparent that most G20 members do not support the concept of a universal levy,” said Canadian Finance Minister Jim Flaherty, whose government opposes it on the grounds its banks had not needed intervention during the recent crises.
