G20 summit agrees on deficit cuts by 2013
Source: BBC

Leaders at the G20 summit in Canada have agreed to cut national budget deficits while endeavouring to promote economic growth.

Host Stephen Harper, the Canadian prime minister said short-term stimulus measures would be needed to get economies moving.

Correspondents note that every major G20 country had already committed to halve deficits within three years.

Proposals for a global levy on banks have been dropped, Mr Harper said.

Instead, that will be left to individual countries.

The head of the International Monetary Fund, Dominique Strauss-Kahn, said focussing on budget deficits was oversimplifying the problem, because the situation differed from one country to another.

He added that more robust growth was also needed, both to reduce unemployment and to lessen the burden of large public debts.

While the summit rejected applying a universal banking levy, it did press for banks to have a greater financial cushion to protect against any future crises.

The G20 agreed that banks must build up higher levels of capital and liquidity but it adopted a longer timeframe for this, saying 2012 should mark the start of the process, not the end.

Speaking to reporters after the summit, US President Barack Obama said tighter regulations, including bigger capital requirements for banks, would be addressed at the next G20 summit in Seoul, South Korea, in November.

"We must do everything in our power to avoid a repeat of the recent financial crisis."