World leaders unveiled Friday a new vision for economic governance, with bold plans to fix global imbalances and give more clout to emerging giants such as China and India.
G20 leaders gather for a group photo at the G20 Summit in Pittsburgh, Pennsylvania, September 25, 2009.
The Group of 20 summit in Pittsburgh committed the International Monetary Fund to shifting at least five percent of its internal voting rights to the developing world and tasked it with a bigger monitoring role.
"The Fund must play a critical role in promoting global financial stability and rebalancing growth," a final statement from leaders of the G20 developed and developing nations said.
Paired with an earlier announcement that the G20 has been promoted over the Group of Eight rich countries to become the world's top economic forum, the two days in Pittsburgh have seen a seismic shift in global economic diplomacy.
President Barack Obama, hosting his first major international summit, said the G20 had agreed landmark reforms that would create the international economic architecture necessary in the globalized 21st century.
"We will bring more transparency to the derivatives market. We will strengthen national capital standards so that banks can withstand losses and pay for their own risks," he said.
"We will create more powerful tools to hold large global financial firms accountable and orderly procedures to manage failures without burdening taxpayers.
"And we will tie executive pay to long-term performance so that sound decisions are rewarded instead of short-term greed."
Indian Prime Minister Manmohan Singh welcomed the decision to replace the G8, which he described as "ill-equipped" to oversee the modern global economy.
"With the rise of Asia, with growth of India, China and Brazil, the economic decision-making has to take into account the views of these countries if it is to have an optimum impact," he said.
Chinese President Hu Jintao said: "Both developed and developing economies should take more solid and effective measures and make greater effort to boost consumption and expand domestic demand."
The G20 also agreed it was too early to begin to scale back the multi-trillion dollar stimulus measures that have helped stave off further economic misery following last year's financial meltdown.
"We will avoid any premature withdrawal of stimulus. At the same time, we will prepare our exit strategies and, when the time is right, withdraw our extraordinary policy support in a cooperative and coordinated way, maintaining our commitment to fiscal responsibility," the final statement said.
During two days of meetings in the aptly chosen re-born former steel city of Pittsburgh, considered a model for economic transformation, there was also tough talk about curbing banking excess, a symbolic issue for many taxpayers.
Leaders, unable to come to enforce measures on the banks, could only muster a pledge -- thin on detail -- to impose "strong international compensation standards aimed at ending practices that lead to excessive risk-taking."
Banks themselves should also expect tighter regulation and monitoring as the excesses of the recent past came in for heavy suspicion in a strongly worded part of the G20 accord.
"We call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending," it said.
"All firms whose failure could pose a risk to financial stability must be subject to consistent, consolidated supervision and regulation with high standards."
The biggest announcement came overnight and was about the Group of 20 itself.
"Today, leaders endorsed the G20 as the premier forum for their international economic cooperation," a White House statement said.
"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."
The G8 -- wealthy nations Britain, Canada, France, Germany, Italy, Japan, Russia, and the United States -- has served in various forms as the premier economic forum since 1975 and holds closely-watched annual summits.
As leaders flew home after a hectic week of international diplomacy that saw them first at the United Nations General Assembly in New York, Pittsburgh breathed a sigh of relief after the day passed without violent protest.