Jennifer M. Freedman and Jonathan Stearns
Saturday, Oct 25, 2008
Asian and European Union leaders called for an overhaul of global banking rules that date back to World War II, lending support to French President Nicolas Sarkozy as he presses the U.S. to join a worldwide effort to resolve the financial crisis.
The heads of state and government “pledged to undertake effective and comprehensive reform of the international monetary and financial systems,” according to a statement released at a two-day meeting in Beijing. Chinese President Hu Jintao, Japanese Prime Minister Taro Aso, German Chancellor Angela Merkel and Sarkozy are among the more than 40 Asian and European leaders participating.
The summit, which ends today, is the first gathering of Asian and EU leaders since calls for coordinated action mounted along with bank failures and plunging stock prices that began last month. The U.S. will host the Group of 20 industrialized and developing nations on Nov. 15 at Sarkozy’s urging.
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South Korea said it “highly valued” Sarkozy’s “strong leadership.” The French leader has compared the effort to the 1944 Bretton Woods conference in New Hampshire that fixed exchange rates, hitched the world to the gold standard and created the International Monetary Fund and World Bank.
The EU has floated the ideas of including more bank supervision, stricter regulation of hedge funds, new rules for credit-rating companies and changes at the IMF.
“The IMF, World Bank and other agencies are falling behind the times,” said Jeon Hyochan, a researcher at Samsung Economic Research Institute in Seoul. “The agencies need to strengthen their ability to take pre-emptive measures.”
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