The group of 20 world leaders will pursue deficit-reduction targets and higher capital requirements for banks in response to the European debt crisis, according to Bloomberg.

G-20 nations with advanced economies will aim to cut their deficits in half by 2013 and start to stabilize their debt-to output ratios by 2016, according to a statement issued yesterday in Toronto.

“The view of the business community is that we need fiscal restraint in order to ensure confidence and therefore sustainable economic growth,” Gordon Nixon, Royal Bank of Canada’s CEO told Bloomberg. “These targets are very important.”

Many G-20 nations carry opposing views, as the U.S. continues to call for increasing economic stimulus. On the other hand, European nations, including Germany, push for fiscal consolidation and budget cuts.

Deficit-reduction goals will be limited to the advanced economies within the G-20.

Leaders agreed that banks must retain higher levels of capital. Although the group expects the changes to be implemented by 2012, it will provide lenders with flexibility in making the necessary adjustments, Bloomberg said.

The U.S. reportedly pushed for stricter capital rules while Europeans argued for a phase-in period.

A U.K.-backed bank tax was not supported by the group at large.

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