Apparently it wasn’t enough that British Prime Minister Gordon Brown took the global lead on recapitalizing the biggest banks during this credit crisis. He has also now decided to call a meeting of world leaders to create new rules for worldwide capitalism.
The Prime Minister wants dozens of world leaders to meet for a major one-off summit where they would rewrite the rules of international capitalism that have stood since 1944.
…Speaking at a summit of European Union leaders in Brussels, Mr Brown said the recent crisis proves the need for much more international co-operation on the regulation of banks and other financial insitutions
He said: "We now have global financial markets, global corporations, global financial flows. But what we do not have is anything other than national and regional regulation and supervision."
…As the first step, Mr Brown revealed that 30 of the world’s biggest banks will now be supervised by what amount to global regulators.
The banks, understood to include RBS, Deutsche Bank and Credit Suisse, will each be overseen by a "college of supervision" taking in regulatory officials from each of the countries in which they operate.
In a paper circulated among EU leaders, Mr Brown proposed a range of other reforms, including: new rules to curb bankers’ bonuses and salaries, stopping pay schemes that "encourage excessive and irresponsible risk-taking", common rules to make banks disclose their assets and liabilities, to prevent them hiding "toxic" loans and a crackdown on the "shadow banking system" of hedge funds and other financial institutions that trade complex financial products often based on debt.
Remarkable stuff. You want to see leadership? This is leadership. That said, it will almost certainly be applauded in many quarters, while pilloried in others as another step toward the end times.