Experts were digesting the G20’s “historic” trillion-dollar bid to pull the world out of recession after Gordon Brown hailed the creation of a “new world order”.
After two days of intense negotiation with his fellow leaders, the Prime Minister claimed victory last night, saying: “This is the day that the world came together to fight back against the global recession, not with words but with a plan for global recovery and reform.
“Today’s decisions, of course, will not immediately solve the crisis, but we have begun the process by which it will solved.”
US president Barack Obama – who flies out of Britain today – was effusive in his praise for Mr Brown’s chairmanship, and branded the outcome “a turning point in our pursuit of global economic recovery”.
There had been fears of tensions with French president Nicolas Sarkozy and German chancellor Angela Merkel.
In the event, both proclaimed themselves satisfied, having secured tough curbs on tax havens and hedge funds.
Mr Sarkozy said “a page has been turned” on the “Anglo Saxon” financial model, while Mrs Merkel said it represented “a very, very good, almost historic compromise”.
But there were no firm commitments to a new fiscal stimulus – which many believed Mr Brown and Mr Obama were hoping for.
The deal prompted a surge of confidence in the City, with the FTSE 100 breaking the 4000 barrier for the first time in six weeks, to close up 169.4 points at 4125.
The key plank of the deal is an injection of £1.1 trillion (€810bn) of additional resources for the International Monetary Fund (IMF) and other international institutions – the biggest increase in their history, according to Mr Brown.
The IMF’s resources will be trebled from $250bn (€186bn) to $750bn (€558bn) dollars, while the special drawing rights made available by the IMF – which can be converted by national governments into currency for a swift injection of liquidity into their economies – will be increased by a further $250bn.
There will a $250bn trade support package through the World Bank, while lending to low-income countries by the multilateral development banks - including the World Bank – will be increased by at least $100bn (€74bn).
The international financial regulatory system will be extended to cover all systemically important institutions – including some hedge funds and other elements of the so-called “shadow” banking system.
A new financial stability board will be established to work with the IMF to spot developing risks in the financial system and provide early warning of emerging problems.
Tax havens which refuse to accept international rules will face sanctions, with the Organisation for Economic Co-operation and Development publishing a list of those that failed to meet the new standards.
On trade, there are commitments not to retreat into protectionism and to reach a conclusion on the currently stalled world trade talks – although crucially there is no timetable.
The leaders also confirmed that there would be a further G20 summit later this year – expected to be in New York in September – to monitor progress on meeting the commitments in the deal.