Monday, January 21, 2008

McStalin Goes Back To 1976

NEW DELHI (Reuters) - The International Monetary Fund should set up an early warning system to prevent crises like the global credit crunch, Prime Minister Gordon Brown said on Monday.
Proposing sweeping changes to international institutions, Brown called for rapid response teams of police and experts to be set up that could be sent quickly to trouble spots to restore order and begin rebuilding after conflicts.
And he called for the creation of a multi-billion-dollar global climate change fund within the World Bank to finance environmentally sustainable development in the poorest countries.
Brown believes that the rapid spread of the credit crisis last year after problems with U.S. sub-prime mortgages points to failings in global financial supervision that must be fixed.
"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," he said in excerpts of a speech he will deliver to business executives in New Delhi.
The IMF, working with the Financial Stability Forum -- a group of central banks, regulators and international bodies -- "should be at the heart of an early warning system for financial turbulence affecting the global economy," he said.
The credit crunch claimed a high-profile casualty when mortgage lender Northern Rock suffered the country's first bank run in more than a century last year.
Northern Rock has borrowed about 26 billion pounds from the Bank of England, creating a huge political headache for Brown.
"The IMF and World Bank ... have to change to become properly equipped for a world where national problems can quickly become global -- and contagion can move as swiftly as the fastest communication," said Brown, who ends a four-day trip to India and China later on Monday.
Brown meets the leaders of France, Germany and Italy as well as European Commission President Jose Manuel Barroso in London on January 29 to discuss how to respond to the crisis.
Brown said he supported India's bid for a permanent place, with other countries, on an expanded U.N. Security Council.
Officials would not say however how many permanent members they believed a reformed Security Council could have.
Britain, China, France, Russia and the United States have been veto-bearing permanent members of the council since the United Nations was created in 1945. But they face growing pressure for reform with Brazil, Germany, India and Japan all demanding permanent seats.
Brown said another problem was that there was no mechanism for quickly sending in experts, police and judges to get states back on their feet when peacekeepers intervened in a conflict.
"We must do more to ensure rapid reconstruction on the ground once conflicts are over," he said.
"I propose that we constitute rapid response standby teams of judges, police, trainers and other civilian experts who can work on the ground to help put countries on the road to economic recovery and political stability," he said.
He called for a new U.N. crisis prevention and recovery fund to provide immediate support for reconstruction in such cases.
This all seems very familiar....

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