The G20 is to take on an expanded role as part of a historic shift that recognises the rising influence of China, Brazil and India.
The leaders of the world's top 20 wealthy and developing nations decided that the G20 will take over the role of preeminent council on global economic cooperation, a function that for more than three decades had been performed by a smaller club of leading industrial countries known as the G8.
The G8 will continue to meet on matters of common importance such as national security.
Despite protests on the streets the atmosphere of the summit is a lot more relaxed than at the fear-driven sessions in Washington last November and in London in April. Still, the global recovery remains fragile, with many big financial institutions under strain.
US Treasury Secretary Timothy Geithner predicted that summit partners would endorse the broad outlines of a proposal to deal with huge imbalances in the global economy - such as large trade surpluses in China and record budget deficits in the US. He said other countries also seemed willing to scale back subsidies supporting fossil fuels that aggravate global warming.
At a news conference, Mr Geithner also said the US supports China's efforts to gain greater voting rights in the International Monetary Fund over the reservations of European nations, who would lose influence.
Given the rise of China's economic powers, "it's the right thing," and Europe recognises that, Mr Geithner said at the start of talks among the world's top 20 wealthy and developing nations. The G20 leaders gathered with their spouses for a welcoming reception at a botanical reserve, and then they parted for separate banquets.
Throughout the day, world leaders descended on the comeback city of Pittsburgh to debate how to keep a fragile global recovery going. Mr Geithner said the G20 countries had reached a consensus on the "basic outline" of a proposal to limit bankers' compensation by the end of this year. He said it would involve setting separate standards in each of the countries and would be overseen by the Financial Stability Board, an international group of central bankers and regulators.
Until now, European countries had pressed harder than the US for limits. "Europeans are horrified by banks, some reliant on taxpayers' money, once again paying exorbitant bonuses," said European Commission President Jose Manuel Barroso. But Mr Geithner predicted the proposed crackdown on bankers' bonuses would be in place by the end of the year.
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