Brown calls for a global regulator
World crisis: Chancellor urges supervisory crackdown as growth forecasts are cut
Thursday 01 October 1998
The committee would bring together the expertise of the International Monetary Fund (IMF), the World Bank and the Basle committee for banking supervision as well as "other international regulatory groupings". It would put in place new codes of fiscal and monetary conduct, improve information flows to the private sector and find better ways of identifying systemic risk to the world's financial system, the Chancellor said.
Government sources said the proposals were one of the "main messages" the Chancellor would push in the annual IMF/World Bank meetings and at the weekend's summit of the G7 group of the world's largest industrialised nations.
In his speech yesterday, Mr Brown also argued for improved international codes on accounting standards and corporate governance, tighter control of hedge funds, and the need for greater attention to the human costs of the global financial crisis, all of which will be on his agenda at the IMF/World Bank meetings. The Chancellor reiterated that the G7 countries remained "ready to support all emerging market countries which are prepared to embark on strong, sound policies". He welcomed the decision on Tuesday of the US Federal Reserve to trim US interest rates by 0.25 points.
He said: "The vigilant action of the US Federal Reserve is designed to sustain domestic demand growth." Mr Brown stressed that, in his, view, the answer to the global crisis, was "not less globalisation, but more", a view he expressed earlier this month in a speech to Japanese bankers in Tokyo.
He argued that "a permanent retreat" into capital controls, such as those recently imposed by Malaysia, was not the right solution. Government sources said the Chancellor would be trying to drive home this message at the IMF/World Bank meetings.
Mr Brown told Commonwealth finance ministers in Ottawa: "Trying to turn the clock back by re-erecting national barriers is neither realistic nor sensible." The Chancellor argued that the existing international financial architecture was not sufficient to regulate and monitor world markets effectively.
"Recent months have exposed problems of transparency, poor risk assessment and inadequate supervision in developed countries' financial markets too. Indeed in the past week we have witnessed the vulnerability and the riskiness of some highly leveraged, speculative hedge funds," he said.
The new committee for global regulation would help address inadequacies in the understanding of relationships between financial markets and countries, inadequacies in the quality of risk assessment and gaps in the international regulatory system, Mr Brown said.
The committee could specifically address the risks posed to the international financial system by organisations such as Long-Term Capital Management, the hedge fund that last week was the subject of a $3.5bn international bail-out.
"Recent events have shown that it is particularly important that we have greater transparency of hedge funds," the Chancellor said.
Outlook, page 19
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 3 The confessions of men who ordered mail-order brides
- 4 General Election 2015: Stephen Hawking says he will vote Labour
- 5 Yazidi sex slaves undergoing surgery to 'restore virginity' after being raped by Isis militants
General Election 2015: Tories sack candidate who said she would never support 'the Jew' Ed Miliband
The four utterly contradictory polls that tell the story of this election and why it is pointless trying to predict the outcome
9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Prospect of Labour-SNP coalition makes one in four voters less likely to support Ed Miliband, says survey
General Election 2015: Stephen Hawking says he will vote Labour
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
EU exit would hit UK economy much harder than neighbouring countries, study finds
iJobs Money & Business
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...
£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...