Gordon Brown Profile RisesBy Reuters - | Posted 2008-10-13 Email Print
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The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank said they would lend commercial banks as much U.S. dollar liquidity they needed.
BROWN PROFILE RISES
Brown also called on world leaders to create a new financial architecture to update the current international economic system, which was set up at a conference in Bretton Woods, New Hampshire, in 1944.
"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," Brown said in a speech at the London offices of Thomson Reuters.
Britain's bank plan called for 37 billion pounds ($64 billion) of taxpayers' cash to bail out three major banks in a move that would likely make the government their main shareholder.
Germany, France, Italy and other European governments also announced rescue packages totaling hundreds of billions of dollars that were designed to combat the banking crisis, the worst since the Great Depression.
Iceland -- forced over the past week to take over three big banks, shut down its stock market and abandon attempts to defend its currency -- officially requested financing from the International Monetary Fund, an IMF official said.
The developments also calmed Princeton University economist Paul Krugman, who was named as the winner of the Nobel prize in economics on Monday.
"I'm slightly less terrified today than I was on Friday," Krugman said. "We're going to have a recession and perhaps a prolonged one but perhaps not a collapse."
Japan said on Monday it was considering whether to guarantee all bank deposits, while the central bank said it might join further global efforts to boost dollar funding to strained money markets.
The two men vying to succeed U.S. President George W. Bush after the November 4 election were formulating their own plans.
Democrat Barack Obama, leading in public opinion polls, proposed a 90-day moratorium on home foreclosures and other measures aimed at creating jobs.
Republican John McCain was also considering rolling out a new economic package.
(Reporting by Reuters bureaus around the world; Additional writing by Eddie Evans; Editing by Gary Hill)
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