G20 leaders, meeting in Pittsburgh, discussed the progress of action points from the London Summit and agreed initiatives to further regulatory reform. The leaders agreed the major failings in regulation and supervision and reckless actions by financial institutions before the crisis and discussed reforms already underway. They identified critical areas for reform as:
- building high quality capital and mitigating pro-cyclicality: rules to improve quality and quantity of bank capital and discourage excessive leverage should be internationally agreed by the end of 2010 and phased in by 2012. All major financial centres will adopt Basel II by 2011;
- reforming compensation practices to support financial stability: FSB should monitor measures taken and suggest any extra action by March 2010;
- improving OTC derivatives markets: all OTC contracts should be traded on exchanges or other platforms and cleared through a CCP by the end of 2012; and
- addressing cross-border resolutions and systemically important financial institutions by the end of 2010: FSB should propose appropriate supervisory, prudential and financial measures by the end of October 2010.
The leaders also called on accounting bodies to achieve a single set of standards and converge on them by 2011, and on FSB to report on progress against non-cooperative jurisdictions in 2009 and 2010.