Leaders of the G20 nations agreed to pump an additional trillion dollars to fight the economic crisis on Thursday, in an effort to shorten the recession and save jobs.
UK Prime Minister Gordon Brown announced that $1 trillion was agreed upon by the leaders meeting in London. The majority, $500 billion, will go to the International Monetary Fund, $250 billion for marked for Special Drawing Rights and another $250 billion to boost trade.
“We have reached a new consensus we tackle global action together, we will do what is necessary to restore growth and jobs”, said Brown. “There are no quick fixes but we can shorten the recession and save jobs and prevent a crisis such as this ever happening again”, he added at the closing news conference.
Two people close to the deal said that France and Germany wanted the regulatory changes first, according to the Associated Press. They had persuaded the G20 leaders to back tougher language in the final statement on stronger rules to avoid a repeat of the current crisis.
French President Nicolas Sarkozy and German Chancellor Angela Merkel have been adamant that the G20 meeting must take concrete steps to regulate banks, hedge funds and other financial institutions.
The US and Britain, however, wanted countries to agree to more economic stimulus ahead of new rules for the Banking system.
Addressing the demand from France and Germany, Brown said the leaders agreed there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end.
World markets reacted positively. The index of top European shares was up 5 percent after Japan's Nikkei gained 4.4 percent. On Wall Street, the Nasdaq was up 4 percent and the Dow Jones 3.6 percent.