Brown calls for new ‘Bretton Woods’ to regulate world markets

October 15th, 2008 - 10:54 pm ICT by IANS  

Gordon BrownBrussels, Oct 15 (DPA) British Prime Minister Gordon Brown Wednesday joined French President Nicolas Sarkozy in calling for “a new Bretton Woods” to better regulate global financial markets and avoid future credit crunches.”We urgently need what you might call the ‘new Bretton Woods’, so that we can restore confidence in the system while dealing with the areas that have been exposed in recent weeks,” Brown said before the start of a European Union (EU) summit in Brussels.

Brown’s proposals included placing the world’s top 30 companies - among them “some of the biggest financial institutions” - under international supervision, and the creation of “an early warning system” designed to prevent future financial crises from spreading.

The premier also called for a global summit to discuss the new Bretton Woods, as well as improved transparency and coordination.

“Instead of having national supervisors, we need a global way of supervising our financial system,” Brown said.

Sarkozy was the first European leader to call for a new Bretton Wood, named after a 1944 conference that established rules for commercial and financial relations among the world’s major industrial states.

“We want to build the beginning of a new financial world as they did in Bretton Woods,” Sarkozy said at an Oct 4 meeting in Paris attended by Brown, German Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi.

Since then, the British premier has lead European efforts to tackle the global financial crisis.

And at their two-day summit in Brussels, EU leaders were set to rubber-stamp a 2-trillion-euro ($2.7-trillion) financial rescue plan inspired by Britain.

Approved Sunday by eurozone leaders in Paris, the plan includes measures to guarantee interbank lending and to partly nationalise shaky financial institutions by providing them with liquidity in exchange for shares.

“The European Council reaffirms its determination to act in a comprehensive and coordinated manner to restore the good functioning of the financial system,” leaders were set to announce, according to a draft statement seen by DPA.

But while there is a shared awareness that common action is essential, some member states have expressed concerns that such measures could create unfair advantages to some institutions.

Speaking on Tuesday, European Commission President Jose Manuel Barroso appealed to governments to put their divisions aside and sign up to the eurozone’s plan.

“Even after this crisis, there are some governments that are opposing a more coordinated European approach,” Barroso said.

“To try and go it alone in this climate would be a fatal mistake for any government anywhere in Europe,” he said.

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