Global Bank Rescue Aims to Halt Crisis Markets Up - Gordon Brown Profile Rises
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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.
($1=.5786 Pound)
($1=.7287 Euro)
(Reporting by Reuters bureaus around the world; Additional writing by Eddie Evans; Editing by Gary Hill)
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