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The policy actions taken by the G-20 countries and others--including aggressive fiscal and monetary stimulus, increased funding to the IMF and backstopping financial systems globally--helped stop the economic freefall. The economic outlook has improved since the last G-20 meeting in April, but the challenge of navigating toward sustainable growth is equally difficult, and the coming period brings the risk of policy missteps as countries begin to plan their exit strategies. On the eve of the G-20 meeting in Pittsburgh, there remain significant divides over the timing and scope of exit strategies from monetary accommodation, the path toward fiscal consolidation and the drive for financial regulatory reform.

Financial regulation will continue to be a key part of the leaders'...