A declaration on further steps to strengthen the financial system has been published following a meeting of G20 Finance Ministers and Central Bank Governors in London on 4-5 September 2009.

Points in the declaration include:

  • The G20 calls on clear and identifiable progress in 2009 on delivering the following framework on corporate governance and compensation practices: (i) greater disclosure and transparency of the level and structure of remuneration for those whose actions have a material impact on risk taking; (ii) global standards on pay structure to ensure that compensation practices are aligned with long-term value creation and financial stability; and (iii) corporate governance reforms to ensure appropriate board oversight of compensation and risk. The G20 calls on the Financial Stability Board (FSB) to report at the Pittsburgh Summit with detailed proposals for developing this framework.
  • The G20 asks the FSB to explore possible approaches for limiting total variable remuneration in relation to risk and long-term performance.
  • The G20 calls on stronger regulation and oversight for systemically important firms including rapid progress on developing tougher prudential requirements to reflect the higher costs of their failure.
  • The G20 calls on rapid progress in developing stronger prudential regulation. This includes calling on banks to retain a greater proportion of current profits to build capital, where needed, to support lending.
  • The G20 calls for convergence towards a single set of high quality, global, independent accounting standards on financial instruments, loan-loss provisioning, off-balance sheet exposures and the impairment and valuation of financial assets.

View Declaration on further steps to strengthen the financial system, 5 September 2009