Brown calls for global overhaul of regulation

British Prime Minister Gordon Brown called for an overhaul of regulation for the world's financial system yesterday to crack down on excessive risk-taking that he believes contributed to the credit crunch.

Mr Brown said he saw broad agreement to hold a summit of major economies this year to reform the global financial system and clear the way for a world trade deal.

Mr Brown, whose rescue plan for British banks has set a template for Europe and the United States, followed up by seeking support at a European Union summit for a thorough overhaul of the world's regulatory systems.

"Europe and the rest of the international community must... act together and without delay to manage the risks of contagion, economic and financial, around the world," a British document circulated to EU leaders said.

He told reporters that central and east European economies would need extra help from international lenders to cope with the credit crisis.

Mr Brown proposed that a forum of regulators and central banks be set up to monitor risks in the financial system, and he called for tough disclosure and due diligence rules to ensure the issuers of financial products properly assess risk.

Mr Brown called for action against executive pay that encouraged "excessive and irresponsible risk-taking by financial institutions".

EU officials say free-marketeering Britain strongly discouraged Brussels from proposing similar measures when Mr Brown was finance minister.

Mr Brown has won international plaudits and a boost to his low standing among voters by injecting billions of pounds (dollars) of taxpayers' cash into the country's banking system in an attempt to turn the tide of the financial crisis.

He said on Monday that the world's leaders needed to reform the financial system with the kind of courage and foresight their predecessors had shown when drawing up the post-war financial order in the 1940s.

"There is now a general agreement there should be an international leaders' meeting," he told a news conference.