Finance ministers of the Group of 20 countries have agreed to boost the finances of the International Monetary Fund (IMF) and end the 50-year-old custom of Europe and the US deciding on the heads of the IMF and the World Bank, respectively.
The ministers have agreed to triple IMF's $250 billion fund to around $750 billion and to lend more to the struggling countries before they face economic emergencies.
The ministers also welcomed the development of a new high-access, quick-disbursing precautionary facility progress by the IMF and World Bank for enhanced lending.
They also asked for speeding up of the second phase of voice and representation reform in the World Bank group by April 2010.
Under the proposals, which will go before the G-20 summit in London on 2 April, the emerging economies like China, India, Brazil etc will gain greater influence over the IMF's activities.
A joint communiqué issued by finance ministers and other financial sector officials in Horsham, West London, last evening, supported calls by India and China to end protectionism and agreed to end the convention by which the heads of the IMF and World Bank are decided by Europe and the US, respectively.
The ministers also promised to "maintain open trade and investment" at the 2 April summit of global leaders, in London. The communiqué also made it clear that raising barriers to trade and free movement of workers would not resolve the crisis, promising to "fight all forms of protectionism".
The IMF will, in the next few months, rate each country around the world on the scale and performance of their fiscal stimulus packages.
The G-20 communique expressed strong support to reviving global economic growth and has asked the IMF to assess the policy responses taken so far by governments and central banks to combat the world economic crisis.
''Our key priority now is to restore lending by tackling, where needed, problems in the financial system head on, through continued liquidity support, bank recapitalisation, and dealing with impaired assets, through a common framework,'' the communique said.
They agreed to ensure appropriate regulation and oversight of all financial institutions, markets, financial instruments and that hedge funds or their managers and enforce proper disclosure norms to assess risks.
While a single global regulator for the financial sector is still off the target, the Financial Services Authority (FSA) is looking for ways of boosting international co-operation in the financial sector.