G-20 agrees on time table for reforms

President Obama said global coordination "brought the global economy back from the brink."

G-20 summit: 6 countries in recovery

The G-20's six largest economies took a big hit during the global recession in the past year and a half. Challenges remain but most appear on the path to recovery.

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WASHINGTON (CNNMoney.com) -- Leaders of G-20 nations committed Friday to a timeline to establish and enforce new rules aimed at spurring financial firms around the globe to improve capital cushions and avoid taking risk.

They agreed to keep working to stimulate economies and stabilize financial systems following the worst financial crisis in decades.

"We brought the global economy back from the brink, we laid the groundwork today for longtime prosperity as well," President Obama said at a press conference after the summit concluded. "Still we know there is much further to go."

The Pittsburgh summit was the third G-20 summit in less than a year, and leaders agreed to work together more closely toward sustained growth and strengthen banking regulations.

By the end of 2010, the nations would agree on rules aimed at improving "quantity and quality" of bank capital and discouraging excessive risk-taking. They also set a goal to start enforcing those rules by the end of 2012.

The G-20 leaders' statement did not detail how the nations would enforce those rules.

In a related measure, the leaders also agreed to set new executive compensation standards that would avoid risky-taking, like "avoiding" multi-year guaranteed bonuses and requiring stronger disclosure for compensation policies.

The leaders asked firms to start putting into place such compensation suggestions, but didn't lay out a method for enforcing them. They also asked a G-20 advisory board to suggest more executive pay measures by next March.

One of the bigger announcements was that the G-20 will now eclipse the G-8 as the group tasked to work out global economic efforts. The G-8 will continue to meet on security issues but will carry much influence, according to Obama administration officials.

"This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest," according to a White House press release.

The G-20 also made some progress on the idea of rebalancing how major countries' economies interact with one another, but leaders stopped short of declaring anything more than unenforceable goals.

Nations with a lot of debt, like the United States, agreed to adopt policies that would "support private savings," and nations with big surpluses, like China, agreed to spur their own domestic demand.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United States, the United Kingdom and the European Union.