2nd UPDATE: UK Brown: Won't Risk Long-Term Fiscal Strength
"We will not do anything to put our long-term fiscal strength at risk," Brown said in a speech at the Foreign Press Association in central London.
"The government's cost of borrowing is low, our inflation target remains the anchor of our policy, we've put in place plans to restore fiscal balance as the economy recovers," Brown said.
Brown's speech comes after the U.K. government last week launched its second major package to support banks and revive lending. The government has said one of the main challenges in getting credit flowing again is that while some domestic banks have increased activity, there has been a drying up of credit from foreign institutions.
Brown, who will host the next summit of leaders from the Group of 20 industrial and developing nations April 2, stressed that international governments must move quickly to agree a "charter of principles" that ensures the regulation and transparency of global markets.
"The patchwork of ad hoc regulation is inadequate...We have to agree a new era of coordination," the prime minister said.
Continuing that theme, Brown stressed that international governments should join the U.K. government in committing to regulating non-bank financial firms, like hedge funds, and new markets in complex financial instruments.
"Regulation will change in every country as we learn the lessons of what happened globally," Brown said.
Brown said the idea of creating a global "college of supervisors" so international governments can track the world's biggest banks' activity in an effort to mitigate risk is gaining momentum.
"The colleges of supervisors will be global...I know that there is American support for this as well as European support," he said.
Brown said he planned to meet the chief executive officers of the world's largest banks in advance of the G20 summit as part of his effort to design workable policy prescriptions.
The prime minister said the International Finance Corporation, a member of the World Bank Group, should consider offering trade finance to developing countries to offset the withdrawal of financing from increasingly risk-averse investors.
Brown added that nationalized lender Northern Rock has repaid much of the government loan that rescued it in advance of the deadline set by the government.
"Over GBP16 billion, some two-thirds of the loan to Northern Rock which the Bank of England provided last year has been repaid and ahead of time," he said.
Asked about recent precipitous falls in the value of sterling, Brown said government policy isn't to target the exchange rate, but to control inflation through interest rates set by the Bank of England.
-By Joe Parkinson and Paul Hannon, Dow Jones Newswires; 44-207-842-9291; joe.parkinson@dowjones.com
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Publié le 26 janvier 2009 Copyright © 2009 Dowjones
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