Clinton calls for November summit on financial crisis

PRESIDENT CLINTON is calling for UK support for a new world economic summit to be held in London in November to discuss the world economic crisis.

The call for support came as the President met the UK Chancellor, Gordon Brown, in private in Washington last night, amid growing fears that the G7 group of richest nations has failed to do enough to reassure panicked investors around the world.

The meeting was expected to help set the tone for the Chancellor's crucial keynote speech to the IMF/World Bank meeting today. It will give crucial signals to the market on the Government's plans for dealing with the fallout from the crisis which has engulfed the City of London.

The President was expected to back UK calls for tighter regulation of world financial markets and also canvass support for his his plan to establish an emergency fund to bail out troubled emerging economies.

Yesterday the pound fell to its lowest level against the German mark for 18 months amid growing expectations that the Bank of England will cut interest rates this week to head off the threat of global recession.

But equity markets failed to revive on the prospect of lower borrowing costs. and the FTSE 100 Index fell a further 101.7 points to close at 4648.7. The air of gloom in London was reinforced by the latest Purchasing Managers Survey showing the lowest rate of growth in the service sector since July 1996.

The Bank of England's Monetary Policy Committee starts its two-day meting tomorrow with most pundits forecasting it will trim rates by a quarter point to 7.25 per cent. This would be the first rate cut since Labour came to power.

The gloom deepened when the Dow Jones Industrial Average tumbled more than 200 points to stand at 7572.54 by early afternoon in New York.

Bill McDonough a governor of the US Federal Reserve, warned of an incipient credit crunch. He said: "I believe we are in the most serious financial crisis since World War Two. If every institution tightens credit, I can assure you we will have a mess." Worries about the possible re-introduction of capital controls in emerging market economies continued to worry the financial markets.

The spectre of capital controls - opposed by most leading economies, including the UK - was raised by the Interim Committee, the main governing body of the International Monetary Fund (IMF), following its meeting on Sunday.

The committee said: "Temporary impediments to capital movements have been utilised under certain circumstances, and the committee asked the board to review the circumstances under which such measures may be appropriate."

Like the G7, the Interim Committee recognised that "the outlook for the world economy has worsened considerably". The committee added: "The downside risks to the current outlook have increased significantly".

Mervyn King, deputy governor of the Bank of England, yesterday became the latest in a long line of figures to spell out proposals for reforming the financial system.

Recommendations by Mr King, who co-chaired a G22 working group on transparency and accountability, included that banks spell out their exposure to hedge funds, that national authorities detail their foreign exchange liquidity position and that the international institutions, such as the IMF and the World Bank, bring an end to their culture of secrecy.

Leading article, Review page 3

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links