World leaders demand tougher banking rules to protect economies from crisis before a meeting of US and French presidents.
West urges financial overhaul
LONDON // World leaders demanded tougher banking rules today to protect economies from crisis before a meeting of US and French presidents that officials said would explore ways to reform a crumbling financial system. Not only is the worst financial crisis in 80 years helping push the West into recession, economies in eastern Europe are suffering, turning to foreign lenders to bolster their financial systems, while Asian nations struggle for their own solutions.
Ukraine said the International Monetary Fund was prepared to give it $14 billion in credit, while Hungary slashed its growth forecast after agreeing a 5 billion euro deal with the European Central Bank to keep euros flowing through its banking system. To prevent any repeat of the crisis, the French president Nicolas Sarkozy has said he would raise the prospect of a global summit to deal with regulatory issues at a meeting with the US president George W Bush on Saturday.
He said the summit should make decisions on transparency, global regulatory standards, cross-border supervision and an early warning system. The White House spokeswoman Dana Perino said the meeting between Mr Bush, Mr Sarkozy and the European Commission president Jose Manuel Barroso was not connected to the global summit. But the British prime minister Gordon Brown said they would discuss "urgent reforms of the international financial system".
He said the post-World War Two financial institutions were out of date. "They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies," he wrote in the Washington Post newspaper. Britain's financial watchdog agreed, saying it was time for regulators "to wipe the slate clean". Adair Turner, chairman of Britain's Financial Services Authority, said the global banking system was past the danger of systemic meltdown although the world faced recession.
"There's no chance of a 1929-1933 depression. We know the lessons, and we know how to stop it happening again," he told the Guardian newspaper. *Reuters