G20 proposes the revision of banking bonus procedures and maintaining anti-crisis plans

Bankers" bonuses should be deferred in order to reward long-term results rather than short-term risk-taking, G20 finance ministers have suggested in a draft proposal issued on Saturday, according to BBC News.

Ministers said that they would continue to provide fiscal stimuli to the world"s economy, despite recovery signs and that emerging economies would see more influence on the world"s stage.

However, all these plans will have to be reviewed and approved at the summit of the G20 leaders to be held this month in Pittsburgh, Pennsylvania.

• Banker bonuses to be awarded for long terms results

The ministers have agreed in principle that bankers" pay should be long term, with no cash bonuses up front, so as to stimulate long term results instead of short term risk taking, and that there should be greater transparency about what bank employees are actually being paid.

The draft that was agreed upon in London, ministers supported Great Britain"s suggestion, as an alternative to capping bonuses, as requested by some countries.

The draft proposals contain plans to withhold bonuses for up to five years until the longer-term impact of bankers" actions on their companies becomes obvious.

They also suggested including claw-back clauses in bonus agreements which would allow money to be recouped if decisions which seemed successful later go bad.

Bonuses would also be awarded in the form of stock instead of cash, which would mean bank employees would only earn money if the company does well.

• Anti-crisis measures to continue in the G20 countries

Some countries, including France and Germany, had wanted the G20 to start discussing "exit strategies" - ways of paring down their spending on fiscal stimulus packages, as they are already leaving the recession behind and they claim that if these expenses were to continue, their public debt would increase to dangerous levels.

British Prime Minister, Gordon Brown, warned however, that any attempt to limit the anti-crisis measures would be a "major mistake" and would run the risk of the world"s economy collapsing again.

The ministers agreed in principle to continue providing help until a recovery of the global economy becomes certain.

• Emerging countries - increased weight in the IMF and the World Bank

The third aspect of the draft proposal quoted by BBC News concerns representation and voting rights of emerging countries in the IMF and the World Bank.

China currently has the same rights as Holland, in spite of the huge difference in size between their two respective economies.

Thus the ministers have agreed to "significantly increase" the decision power of emerging countries on a global level.

The project of finance ministers of the G20 will be turned into a set of guidelines for the Council of Financial Stability, which comprises officials of the central banks and of the regulatory authorities all over the world.

These guidelines will be discussed and voted in Pittsburgh, but it will be up to every government to decide whether or not they will be turned into laws