G20 nations stress economic recovery challenges

G20 finance ministers have said the recovery from the global economic crisis has been faster than expected, but significant challenges remain.

Meeting in South Korea, the ministers and central bankers from the world's leading economies said excessive budget deficits should be tackled immediately.

They did not come to any agreement on a global bank tax.

The meeting sets the agenda for a summit of G20 leaders in Toronto on 26-27 June.

"The recent volatility in financial markets reminds us that significant challenges remain and underscores the importance of international co-operation," the final statement from finance ministers said.

Recent events "highlight the importance of sustainable public finances", it added.

The statement also said the financial sector should make a "fair and substantial contribution" to future rescue deals - but did not refer to any bank tax.

A global bank tax is supported by the US and Europe, but opposed by some developing nations, as well as Canada and Australia.

The final statement did signal tougher guidelines for banks on how much capital they should hold in reserve.

The ministers also called for more transparency, regulation and supervision for hedge funds, credit rating agencies, compensation practices and over-the-counter derivatives.