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G20 leaders close to global deal G20 leaders close to global deal
(10 minutes later)
Leaders of the world's largest economies are close to an agreement to tackle the global financial crisis.Leaders of the world's largest economies are close to an agreement to tackle the global financial crisis.
The International Monetary Fund, which helps struggling economies, is set to get up to $500bn (£340bn) more funding.The International Monetary Fund, which helps struggling economies, is set to get up to $500bn (£340bn) more funding.
There may also be a deal to "name and shame" countries that breach free-trade rules, BBC business editor Robert Peston reports from the G20 summit.There may also be a deal to "name and shame" countries that breach free-trade rules, BBC business editor Robert Peston reports from the G20 summit.
There will be measures to open up tax havens. Tighter regulation of banking and bankers' pay is also expected.There will be measures to open up tax havens. Tighter regulation of banking and bankers' pay is also expected.
"The [regulatory] system needs to be more intrusive and ask more questions," UK Chancellor Alistair Darling told BBC News."The [regulatory] system needs to be more intrusive and ask more questions," UK Chancellor Alistair Darling told BBC News.
Significantly, leaders will also agree changes that will in effect create $250bn of new money to stimulate the global economy.Significantly, leaders will also agree changes that will in effect create $250bn of new money to stimulate the global economy.
They will substantially increase the currency reserves of poorer countries by expanding the so-called special drawing rights the IMF makes available to economies in trouble.They will substantially increase the currency reserves of poorer countries by expanding the so-called special drawing rights the IMF makes available to economies in trouble.
DisagreementsDisagreements
Earlier, UK Business Secretary Lord Mandelson told the BBC there were still some issues to iron out.Earlier, UK Business Secretary Lord Mandelson told the BBC there were still some issues to iron out.
Darling: Progress made on tradeDarling: Progress made on trade
"[Disagreements] persisted overnight," Lord Mandelson told the BBC News channel, particularly over levels of funding for the IMF, regulation of tax havens and measures to boost global trade."[Disagreements] persisted overnight," Lord Mandelson told the BBC News channel, particularly over levels of funding for the IMF, regulation of tax havens and measures to boost global trade.
It is understood that Gordon Brown wants to go further than some other leaders on these matters.It is understood that Gordon Brown wants to go further than some other leaders on these matters.
"Our Prime Minister is excessively ambitious in what he wants out of this summit," UK Business Secretary Lord Mandelson said. "A good thing too, because there's absolutely no point in people just coming here and rehearsing old arguments restating old commitments.""Our Prime Minister is excessively ambitious in what he wants out of this summit," UK Business Secretary Lord Mandelson said. "A good thing too, because there's absolutely no point in people just coming here and rehearsing old arguments restating old commitments."
Key measuresKey measures
Leaders began the day with a working breakfast. They took their seats at 1045 BST to start what is expected to be four-and-a-half hours of talks. Leaders started the day with a working breakfast. They took their seats at 1045 BST to begin what one minister described as "lively discussions".
Before they began, they assembled for a team photo. Canadian Prime Minister Stephen Harper missed it when he was pulled aside by an aide. When the photo was re-taken, however, the Italian Prime Minister, Silvio Berlusconi, was absent.Before they began, they assembled for a team photo. Canadian Prime Minister Stephen Harper missed it when he was pulled aside by an aide. When the photo was re-taken, however, the Italian Prime Minister, Silvio Berlusconi, was absent.
Different drafts of the final communique are circulating at the summit, reflecting differing proposals on a number of issues.Different drafts of the final communique are circulating at the summit, reflecting differing proposals on a number of issues.
The leaders of the world's largest economies are expected to announce measures in the following key areas:The leaders of the world's largest economies are expected to announce measures in the following key areas:
• IMF boost: $500bn of additional money will be loaned to the International Monetary Fund, the emergency lender for countries in financial trouble, in addition to the $250bn already pledged. Its resources have been depleted in recent months by having to help a number of Eastern European nations• IMF boost: $500bn of additional money will be loaned to the International Monetary Fund, the emergency lender for countries in financial trouble, in addition to the $250bn already pledged. Its resources have been depleted in recent months by having to help a number of Eastern European nations
• Tax havens: Treasury minister Stephen Timms says the G20 have agreed to impose sanctions on tax havens that refuse to sign up to OECD rules to fight money laundering and tax evasion, although discussions are continuing over whether unco-operative havens will be named and shamed• Tax havens: Treasury minister Stephen Timms says the G20 have agreed to impose sanctions on tax havens that refuse to sign up to OECD rules to fight money laundering and tax evasion, although discussions are continuing over whether unco-operative havens will be named and shamed
• Global trade: There will be about $250bn committed to boost international trade, UK Chancellor Alistair Darling confirmed. The figure will include national efforts already announced• Global trade: There will be about $250bn committed to boost international trade, UK Chancellor Alistair Darling confirmed. The figure will include national efforts already announced
• Fiscal stimulus: No new money will be pledged. However, leaders are expected to pledge to do whatever it takes to boost their own economies and emphasise that - globally - $2 trillion is already being spent to tackle the global recession• Fiscal stimulus: No new money will be pledged. However, leaders are expected to pledge to do whatever it takes to boost their own economies and emphasise that - globally - $2 trillion is already being spent to tackle the global recession
• Protectionism: There will be a commitment to naming and shaming countries that breach free trade rules• Protectionism: There will be a commitment to naming and shaming countries that breach free trade rules
• Financial regulation: Tighter limits on the financial system are expected, including the activities of hedge funds, which are currently unregulated investment funds• Financial regulation: Tighter limits on the financial system are expected, including the activities of hedge funds, which are currently unregulated investment funds
• Bankers: There may also be measures to clamp down on bankers' pay.• Bankers: There may also be measures to clamp down on bankers' pay.
Senior EU officials, however, have told the BBC's Joe Lynam that there is concern that there will not be as much emphasis on bankers' pay and bonuses as they had hoped.Senior EU officials, however, have told the BBC's Joe Lynam that there is concern that there will not be as much emphasis on bankers' pay and bonuses as they had hoped.
An agreement in general terms stating that there should be no reward for failure is expected, but fixed terms and conditions may be much harder to agree, EU officials have told our correspondent.An agreement in general terms stating that there should be no reward for failure is expected, but fixed terms and conditions may be much harder to agree, EU officials have told our correspondent.
ProtestsProtests
SUMMIT SCHEDULE 0730 G20 leaders arrived at the Excel Centre, East London0830 Summit began with working breakfast1530 Closing statement by Brown1745 Obama closing press conference All times BST Read Robert Peston's blog Franco-German engine roars again G20 summit in pictures: Day two SUMMIT SCHEDULE 0730 G20 leaders arrived at the Excel Centre, East London0830 Summit began with working breakfast1530 Closing statement by Brown1745 Obama closing press conference All times BST Read Robert Peston's blog Franco-German engine roars again G20 summit in pictures: Day two
Protesters gathered outside the summit, but in smaller numbers than Wednesday's demonstrations in London's financial district.Protesters gathered outside the summit, but in smaller numbers than Wednesday's demonstrations in London's financial district.
One man collapsed and died at the protest, police said, and 88 arrests were made.One man collapsed and died at the protest, police said, and 88 arrests were made.
A small group of protesters also gathered earlier at the London Stock Exchange, but have since dispersed.A small group of protesters also gathered earlier at the London Stock Exchange, but have since dispersed.
In the run-up to the summit, the main differences have been between France and Germany, who are pushing for stricter regulation of the financial system, and the UK and US, who think extra government spending would do more to ease the crisis.In the run-up to the summit, the main differences have been between France and Germany, who are pushing for stricter regulation of the financial system, and the UK and US, who think extra government spending would do more to ease the crisis.
French President Nicolas Sarkozy has threatened to walk out of the meeting if the G20 does not come up with concrete results. On Wednesday, Mr Sarkozy made it clear he was unhappy with the draft agreement.French President Nicolas Sarkozy has threatened to walk out of the meeting if the G20 does not come up with concrete results. On Wednesday, Mr Sarkozy made it clear he was unhappy with the draft agreement.
'Balancing act''Balancing act'
The head of the IMF, Dominique Strauss-Kahn, told the BBC that in addition to increasing funding for his organisation, he thought dealing with banks' toxic assets - which caused the world's credit markets to freeze up - must be a priority.The head of the IMF, Dominique Strauss-Kahn, told the BBC that in addition to increasing funding for his organisation, he thought dealing with banks' toxic assets - which caused the world's credit markets to freeze up - must be a priority.
"I am worried about how the balance sheets are going to be cleared up, this cleansing of the balance sheet is the problem we really need to address now.""I am worried about how the balance sheets are going to be cleared up, this cleansing of the balance sheet is the problem we really need to address now."
Security tight for G20 summitSecurity tight for G20 summit
Leaders will release the final communiqué, which outlines their agreement, at about 1530 BST.Leaders will release the final communiqué, which outlines their agreement, at about 1530 BST.
"This is by no means the end of the process," BBC chief economics correspondent Hugh Pym warns. "The G20 will need to meet again.""This is by no means the end of the process," BBC chief economics correspondent Hugh Pym warns. "The G20 will need to meet again."
He says the leaders will have a difficult balancing act in presenting the final agreements later on Thursday.He says the leaders will have a difficult balancing act in presenting the final agreements later on Thursday.
There will have to be a bit of pragmatism over what can and cannot be achieved, our correspondent says, but they must also convey a sense that they really have a vision as to how they can bring economies through this recession.There will have to be a bit of pragmatism over what can and cannot be achieved, our correspondent says, but they must also convey a sense that they really have a vision as to how they can bring economies through this recession.
The recession has worsened since G20 leaders met last November in Washington.The recession has worsened since G20 leaders met last November in Washington.
Both the IMF and the World Bank expect the world economy to shrink for the first time in decades this year.Both the IMF and the World Bank expect the world economy to shrink for the first time in decades this year.
Reporting from from the Excel Centre, BBC business correspondent John Moylan said the summit would be judged a success if the global recession became a short, sharp shock, rather than a very long downturn.Reporting from from the Excel Centre, BBC business correspondent John Moylan said the summit would be judged a success if the global recession became a short, sharp shock, rather than a very long downturn.
The G20 group of nations is made up of the world's most powerful economies, accounting for 90% of the world's economic output, 80% of world trade and two-thirds of the world's population.The G20 group of nations is made up of the world's most powerful economies, accounting for 90% of the world's economic output, 80% of world trade and two-thirds of the world's population.