UK calls for new Bretton Woods (loans, credit, debt, mortgages)

[bale002]

I have been expressing this expectation for about a week now. Read article (http://news.yahoo.com/s/nm/20081013/bs_nm/us_financial3_22 - broken link).

Here is an excerpt

Governments across the world moved on Monday to shore up tottering global banks with multi-billion dollar bailouts and Britain called for a new Bretton Woods agreement to reshape the world financial system.

I have the impression that the US is too embarrassed to take the lead, the Europeans feel too weak, so it is up to the British, with its Labour government, to take the initiative.

Any guesses what this new "shape" for the world financial system may take? Not what you would like to see, but what the authorities in power may actually do.

[Barkingowl]

I think they'll be calling for a global central bank.

[bale002]

See this article (http://news.yahoo.com/s/ap/20081015/ap_on_bi_ge/eu_eu_brown_imf - broken link).

It seems the basic idea right now is to expand the role of the IMF. The goal is to arrange a meeting in November or December.

Germany and the EU in general have backed the call. The French and US heads of state are meeting in the next few days at Camp David.

We'll see if the US, China and India support a summit to re-arrange global financial system rules.

[GregW]

About time!

[paperhouse]

Wait. Does this mean they want to again tie currencies to a commodity rather than a total fiat system?

[gwynedd1]

Suckers. Once there is a global currency aka SDR , they can manufacture loans for swamp land anywhere in the world.

[bale002]

My expectation is that they want to devise a more fluid system for "trafficking" in production and consumption, saving and investment, across continents.

This may include converting debt/credits into ... I don't know what ... equity/ownership in assets ... sort of like reverse mortgages on aging populations.

[bale002]

The UK, France and the G-8 will try to organize a global financial summit in New York in November; Bush and Sarkozy will talk about it this weekend.

It seems that the thrust of the British idea is to expand the role of the IMF and the World Bank, making them the global regulatory supervisors ... some officials have been quoted as using words like a new Bretton Woods and so on.

The latest article I found on this is in Spanish (http://espanol.news.yahoo.com/s/ap/081015/negocios/eur_eco_europa_crisis - broken link).

[bale002]

According to this article (http://news.yahoo.com/s/nm/20081016/bs_nm/us_financial5_24 - broken link).

An excerpt:

But Japan's Aso, who chairs the Group of Eight this year, again expressed caution about such a summit.

"Holding such a meeting would mean we are just one step away from a worst-case scenario," he said in parliament. "We are considering the idea, but it is most important to keep the situation from worsening to that stage."

[bale002]

After the meeting among the presidents of France, the European Commission, and the US, it seems now the idea is to organize a series of global summits. Both developed and developing nations would be represented. Various world leaders would be contacted beginning next week.

The first summit would take place in the United States some time in November and focus on the "principles of reform" needed to fix the world's financial system.

Later summits would be designed to implement agreement on specific steps to be taken to meet those principles.

The Europeans have called for a revamp of the international financial architecture established after World War Two at the 1944 Bretton Woods conference.

In any case, global leaders are reassessing the entire global financial system, including a review of the role of the IMF and other international financial institutions.

One possibility is setting up a cross-border regulatory forum to monitor risks in the financial system, tough new disclosure and due diligence rules, and guidelines on executive pay, focusing on the world's 30 biggest financial institutions.

Part of this package may include reform of the rating agencies, hedge funds, and tax havens.

The summits may also explore the future of currency systems and the relationships between the major world currencies.

Reference article 1 (http://news.yahoo.com/s/nm/20081019/bs_nm/us_financial5_57 - broken link)

Reference article 2 (http://news.yahoo.com/s/ap/20081019/ap_on_bi_ge/meltdown_bush_38 - broken link)