What is Mr. Brown proposing now?
British Prime Minister Gordon Brown wants reforms to the international financial system. His London speech Monday outlined five principles that should govern any overhaul. First, transparency and the adoption of internationally agreed-upon accounting standards. Second, integrity and closer focus on conflicts of interest. “This includes a system of remuneration founded on long-term success, not short-term irresponsibility,” he said. Third, responsibility and ensuring boards are effectively managing risks. Fourth, closer regulations and supervision of banks. This should also help to “prevent speculative bubbles when markets are rising and to cushion the impact of shocks when they are falling.” Fifth, a new Bretton Woods agreement (established in 1944 and which set up the International Monetary Fund and the World Bank) that would build a new global financial framework for the years ahead.
