Brown calls for new Bretton Woods pact as his global reputation soars amid crisis

Published on Monday 13 October 2008 22:17

THE world needs a new "Bretton Woods" pact to shore up the global financial order in the 21st century, Gordon Brown has said.

The Prime Minister summoned the memory of the 1944 agreement which created the International Monetary Fund, as he unveiled a 37 billion part-nationalisation of three of Britain's major banks. Mr Brown has been cast as a central figure in tackling the global financial crisis, as other world leaders have moved to adopt aspects of the UK's rescue plan.

The Prime Minister told a London audience of financiers and media that he had tried to call for a new pact before, but other "priorities" had crept up for those he had been trying to convince.

"Around us we must build a new Bretton Woods – a new financial architecture for the years ahead," Mr Brown said, referring to the summit attended by Winston Churchill and US president Franklin D Roosevelt six decades ago.

The two great wartime leaders were "taking steps to forge the reconstruction and peace that was to come," Mr Brown said.

"Sometimes it does take a crisis for people to agree that what is obvious and should have been done years ago can no longer be postponed." Mr Brown urged other governments to take similar measures, warning that "we are living in extraordinarily turbulent times".

The Bretton Woods summit in New Hampshire, US, was where the idea of the IMF and General Agreement on Tariffs and Trade (GATT) first occurred. It was attended by the economist John Maynard Keynes, who advocated state intervention.

Mr Brown said: "With the same courage and foresight of their founders, we must now reform the international financial system around agreed principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders."

Asked whether his premiership was benefiting from his handling of the turmoil in the markets, Mr Brown insisted that he had not wanted to be part of a government that bought shares in ailing banks.

He also predicted that the UK housing slump would be over sooner than the crisis in America.

The latest poll, by YouGov, shows Labour's rating was up three points to 33 per cent, while the Conservatives were down three to 43 per cent. The Liberal Democrats, on 14, were also down two, despite their finance spokesman, Vince Cable, being one of the few to predict the market meltdown.