President Barack Obama chairs a meeting of the United Nations Security Council at the United Nations headquarters, Thursday, Sept. 24, 2009.

G-20 Pittsburgh Summit: The Group of 20 leading developed and emerging nations, meeting in the former steel capital of the United States, are reported to be close to an agreement to improve global coordination of economic policies, a significant change to the world economy that would envision member countries monitoring each others' commitments, according to G-20 officials. Restrictions on banker pay and financial regulation are also on the cards.

The leaders will also announce today that the Group of 20 nations will replace the G-8 as the main forum for global economic coordination, reflecting a shift in power from rich countries to emerging markets.

Tim Geithner, US Treasury secretary, on Thursday told reporters in Pittsburgh that the delegations were “actually very close” on issues such as compensation and bank regulation.

He said governments wanted to see “reforms in compensation by the end of this calendar year” to ensure that pay schemes did not encourage excessive risk-taking.

Geithner said there was also broad support for the balanced growth framework but admitted“it is a harder thing to do because we are a world of sovereign nations.”

 At the same time, divisions remain on how to overhaul control of the International Monetary Fund with European countries resisting a cut in their board seats.

“There will be broad agreement around many elements of a compensation package,” Michael Froman, Obama’s G-20 negotiator, told Bloomberg Television yesterday.

Financial Stability Board (FSB) chairman Mario Draghi, who is governor of the Bank of Italy, is in Pittsburgh to brief the leaders on regulation, including bank capital requirements.

The US is pushing for banks to have more capital but European countries have said it would hit their banks, while Europe is seeking tougher banking regulation. The FSB's report, which will be presented at today, will say the issues are two sides of the same coin.

According to the draft communiqué, the G-20 will pledge to move beyond the "name-and-shame" approach on tax havens it agreed to in April. Instead, it will move toward new systems of review and countermeasures to ensure that countries that promise to abide by transparency rules actually follow through.

Final agreements won't be made until Friday after the G-20 leaders review final language and agree eleventh-hour deals. In addition to the dispute over the IMF, the flashpoints include how to boost capital levels of the world's biggest banks.

The Financial Times reports that Angela Merkel, Germany’s chancellor, who faces a general election on Sunday, said the fight against global economic imbalances should not become the central issue at the summit - - in contradiction of Barack Obama’s stated objectives.

Speaking in Berlin before boarding her flight, Dr Merkel came close to accusing the US and Britain of backtracking on financial market regulation and global limits on bankers’ bonuses by shining the spotlight on the export-oriented economic policies of Germany and China: “We should not start looking for ersatz issues and forget the topic of financial market regulation. We cannot afford to neglect this issue now.”

Merkel turned on Washington, saying:“Imbalances are an issue, but we must look at all the factors...We must talk about imbalances and name the reasons why they came into being.”

 Brazil's president heading to the G-20, with CNBC's Maria Bartiromo.

The G-20 represents about 90 percent of global gross national product, 80 percent of world trade (including trade within the European Union) as well as two-thirds of the world's population, according to the IMF.

Measured by purchasing power, Asia accounts for more than 35 percent of world GDP, compared with the US and the EU at 20 percent each.

The G-20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK and the US, plus the European Union, represented by the rotating Council presidency and the European Central Bank. The managing director of the International Monetary Fund and the president of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate at G-20 meetings.