Brown calls for new "Bretton Woods" meeting

LONDON (Reuters) - The world needs a new Bretton Woods agreement to make the architecture of the global financial system fit for purpose in the 21st century, Prime Minister Gordon Brown said on Monday.

The Bretton Woods conference in 1944 helped draw up the post-war world financial order and created the International Monetary Fund and World Bank. Brown said the old rules had been found wanting in the modern era.

"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. But we must now create the right new financial architecture for the global age," Brown said in a speech at the London offices of Thomson Reuters.

His comments came after his government committed to putting in 37 billion pounds of new capital into banks on Monday, potentially making it the largest shareholder in Royal Bank of Scotland and LLoyds TSB in its most dramatic salvo yet against the credit crisis engulfing the world.

Governments in the euro zone also said on Monday they would follow Britain's lead and recapitalise their banks and move to guarantee interbank lending in a bid to unfreeze wholesale markets.

Brown said these steps should help ease the strains in the financial system which in the last month has felled institutions like the giant U.S. investment bank Lehman Brothers but more longer-term measures were needed to prevent future crises.

He said he would push his plan at a meeting of European Union heads of government on Wednesday, adding he had first mooted the idea 10 years ago but found few takers at the time.

Brown said he had also been talking to U.S. President George W. Bush and had reached the basis for common agreement. Leaders of the Group of Eight countries are expected to meet for a summit in the next few weeks.

The crisis has helped the fortunes of the former finance minister whose government was only a month ago lagging by more than 20 points to the Conservatives in the opinion polls.  Continued...