New York: In a bid to rope in countries such as India to join hands in tackling the financial meltdown in the US, British Premier Gordon Brown has said it cannot be left to the elite G-8 club alone to come out with strategies and wanted the involvement of G-20, which includes developing nations, as well.
With ways to prevent recurrence of the financial crisis high on the agenda of the world leaders assembled for the UN General Assembly here, the suggestion of Prime Minister Manmohan Singh, an economist-turned politician, for a new international initiative to bring structural reform in the global financial system got instant support of Brown.
During their meeting on the margins of the UN General Assembly, Brown agreed with Singh that the existing global financial architecture was not robust enough to deal with the international turbulence in financial markets.
Highlighting the need for broader strategies, Brown said the G-20 will be well-suited to deal with the problem.
Addressing the UNGA session, Singh himself said there is a need for a new international initiative to bring structural reform in the world’s financial system with more effective regulation and stronger systems of multilateral consultations and surveillance.
The explosion of financial innovation unaccompanied by credible systemic regulation has made the financial system vulnerable. “The resulting crisis of confidence threatens global prosperity in the increasingly interdependent world in which we live,” Singh said.
Brown and Singh felt it was high time there was a single monitoring mechanism for a surveillance of the world’s financial system. Singh felt the system must be designed in as inclusive a manner as possible.
Singh said the existing financial system was not serving the purpose
The two leaders felt that the financial meltdown earlier used to affect the periphery only but now it has hit the centre too. The financial fragility is leading to weakness of financial institutions and weakness in confidence.
The two leaders also felt that there should be better coordination for coordinated actions to increase the confidence level in the financial system.
Singh was of the view that the capital has become more global and the financial system has become seamless. There is no international regulation, the Prime Minister said.
The issue of a financial crisis itself has come out on most occasions during Singh’s bilateral meetings due to the Prime Minister’s background as he is such a renowned economist with a lot of experience.
“Of course, he said what he thought,” said Foreign Secretary Shivshankar Menon.