21 Jan, 2008
Helen Pow - 21-Jan-2008
Brown believes a worldwide financial watchdog should be established
to avoid another global credit crisis, according to the Daily
Brown wants institutions such as the International Monetary Fund
and the World Bank to be reformed to focus more on identifying
rapidly changing economic conditions and warn against global market
disruptions before they become too serious.
The paper quoted Brown as saying in a speech to business leaders in
New Delhi today: "The IMF and World Bank were created for the
age of sheltered nation states. But they now have to change to
become properly equipped for a world where national problems can
quickly become global - and contagion can move swiftly as the
"So with financial markets and flows transformed by
globalisation, I propose that - acting with the same independence
as a central bank - the IMF should focus on surveillance of the
global economic and financial system and thus prevent crises not
just resolve them."
But Brown believes the Northern Rock debacle was caused by a bad
business plan and could therefore not have been prevented by such a
global watchdog. Although he says the wider-effects of the
sub-prime crunch in the US could have been lessened.