G20 to keep stimulus

By Anna Willard and Glenn Somerville

BRUSSELS/WASHINGTON (Reuters) - G20 countries agree it is too soon to begin withdrawing measures to end the global economic crisis and at talks in London this week will discuss coordinated actions to wind down trillions of dollars support and push forward financial reforms.

The United States will propose an outline for tougher global bank capital standards at the meeting of finance ministers, starting a process to eventually supplant the Basel II standards with a broader-based effort.

U.S. Treasury Secretary Timothy Geithner said a stronger capital accord was a critical part to make the financial system more stable by limiting the risk of large institutions failing.

"We're going to be outlining a framework of principles to begin a discussion -- not to reach agreement on -- but to discuss a framework of principles on a new international capital accord that will put in place, once the crisis is behind us, a more conservative framework of constraints on leverage in the financial sector across the major globally active financial institutions," he told a news conference.

The accord would be developed under the auspices of the Financial Stability Board, Geithner said, an international body that was recently expanded to include major emerging economies such as China, India and Brazil.

European finance ministers meeting in Brussels on Wednesday said the worst of the recession was over in the 16 countries that use the euro currency but ruled out an immediate end to the fiscal and monetary help.

A British government source said there was agreement on this in the Group of 20 developed and developing economies, whose finance ministers meet in London on Friday this week, and "everyone thinks it is certainly too early to declare victory."

Geithner agreed, saying that although the global economy has pulled back "from the edge of abyss" in the past year and was showing early signs of resuming growth, it was too early to let up on stimulative efforts.