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'Bold solutions' needed to deal with global economic downturn (09/02/2009)

Prime Minister speaking at Lancaster House (Getty Images)

Gordon Brown has called upon the international community to pursue 'bold solutions' to deal with the global economic downturn.

Speaking at a Q&A session in London, the PM said that nations should use April’s G20 Summit to reform institutions such as the International Monetary Fund and to turn the world economy away from 'financial protectionism' and 'economic nationalism'. The unique nature of the global financial crisis demanded a move away from 'old orthodoxies', he said.

Read the transcript of the Prime Ministers speech and Q&A session.

The Prime Minister said that the International Monetary Fund and the World Bank were not fully equipped to deal with the tasks at hand and that they needed to 'change their roles fundamentally'. He said the IMF should develop a more enhanced surveillance function of markets and act more like a central bank while the World Bank should increase its resources and play a greater role in environmental development.

Speaking on the financial industry in the UK, Mr Brown said the Government would aggressively pursue a 'no rewards for failure' policy in order to sweep aside a short-term bonus culture in British banks. He said:

'I believe, as a society, we should support hard work, effort, enterprise and responsible risk-taking. We should not in any way condone, but should punish irresponsible and excessive risk-taking.

The old short-term bonus culture is gone; that there are no rewards for failure, but penalties for failure; that in the future there must be rewards for success - but long-term sustainable success and not just short-term gains.'

Chancellor Alistair Darling announced on Sunday that the Government had commissioned a review of corporate governance and management practices at financial institutions in the UK.



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