Theophilos Argitis and Kathleen Hays
Saturday, Nov 1, 2008
Canadian Finance Minister Jim Flaherty warned that the world’s largest economies shouldn’t re-engineer the global financial system, and said the Group of Seven nations hasn’t considered intervening in currency markets.
Flaherty, in an interview with Bloomberg Television yesterday in New York, said the best approach is for the G-7 governments to focus first on shoring up their own regulatory frameworks.
“We don’t need to recreate the world right now,” Flaherty said. “What people expect of us, quite frankly, in our countries is to get our own houses in order.”
The U.S. will host a global economic summit of 20 world leaders in Washington beginning Nov. 14. The agenda will include discussion of the causes of the financial crisis and a review of progress in addressing them.
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European leaders have said the crisis justifies major changes in the way financial institutions are regulated. French President Nicolas Sarkozy has said the crisis demands a response like the Bretton Woods conference in New Hampshire in 1944 that fixed exchange rates, hitched the world to the gold standard and created the International Monetary Fund and World Bank.
“In terms of creating a brand new institution at this stage in the middle of a crisis, I think we can spend our efforts more profitably” strengthening domestic regulations, Flaherty said. “I don’t think it’s realistic at this time to expect there will be some grand resolution, some grand scheme.”
The Washington talks, Sarkozy says, should aim to impose stricter regulation on financial institutions, curb bonus packages for bankers and overhaul international accounting rules. U.K. Prime Minister Gordon Brown has said he wants greater cross- border oversight of banks and other financial firms.
This article was posted: Saturday, November 1, 2008 at 5:36 am