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18.10.2008 Business & Finance

EU, US Call For Global Summit - On World Financial Crisis

The Group of Eight major industrial nations announced last Wednesday that they will hold a global summit — perhaps as early as November, in New York — to forge common action to prevent another economic meltdown.

French President Nicolas Sarkozy, said all European Union nations backed radical restructuring of global institutions like the International Monetary Fund and World Bank.

 

He called for a meeting "preferably in New York, where everything started" and said it should lead to "a new capitalism."

Sarkozy said emerging economies such as China, India and others outside the G-8 should also participate because "no one should feel excluded from what we are recasting."

EU leaders meeting in Brussels "all agreed that we don't want the same causes to produce the same effects in future," the French leader said.

 

"We don't want all this to start again; we want lessons to be learned."

British Prime Minister Gordon Brown said the meeting would require vision similar to the creation of the United Nations and the Bretton Woods conference that laid out the post-World War II international financial and monetary system.

The G-8 leaders said in a joint statement released by the White House that they were united in their commitment to change the regulation of the world's financial sector to restore confidence and "remedy deficiencies exposed by the current crisis."

"We are confident that working together, we will meet the present challenges and return our economies to stability and prosperity", they said.

Brown, a longtime former Treasury chief widely seen as a leader in crafting policies to combat the financial crisis, said he wanted a group of supervisors from major nations to monitor the world's 30 largest financial institutions.

"I believe there is scope for agreement in the next few days that we will have an international meeting to take common action for very large and very radical changes", Brown told reporters before meeting for talks on the financial crisis with other EU leaders, who on Wednesday endorsed a $2.3 trillion continentwide emergency bailout for the banking sector.

In a document given to EU leaders at a Wednesday summit and obtained by The Associated Press, Brown said he wanted banks to rethink how they dealt with risk, and called for rules that made banks hold to enough funds to cover potential losses, improve transparency in the system and eliminate conflicts of interest.

 

 Brown also wants executives to take more responsibility and end a system that encouraged reckless risk-taking.

—AP

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