Brown urges world to follow of example of bank rescue
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Published
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Fri, 10 Oct 2008 04:39
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London - British Prime Minister Gordon Brown has called on governments around the world to follow the example of Britain in taking "ground-breaking" decisions to stabilize the banking system. Writing in the Times newspaper Friday, Brown said governments should put money into struggling banks and offer similar guarantees worth hundreds of billions to persuade the banks to start lending to each other again. The British government Wednesday announced a bail-out programme consisting of a cash injection of 50 billion pounds (87 billion dollars) into ailing banks, plus an increase of 200 billion pounds of Bank of England liquidity and 250 billion pounds in credit guarantees to cover inter-bank lending. Brown has also written to European Union (EU) leaders to adopt a "concerted approach" on the financial crisis and adopt aspects of the British package, especially the lending guarantees. Britain says the package is likely to be discussed at Friday's meeting of Group of Seven (G7) finance minister and next week's European Union summit. Brown said a global solution to a global problem was required. He says that he never expected to find himself "taking a government stake in banks," but added that countries had to abandon "outworn dogmas" and embrace new solutions. He also urged the adoption of cross-border rules on transparency and the highest standards of conduct to guard against irresponsible risk-taking. A new system of supervision should also be introduced to cope with the huge flows of capital between financial institutions.
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