As world financial leaders gather to grapple with the ongoing financial crisis, British Prime Minister Gordon Brown is calling for a new world order.
That means international supervision of financial institutions, global accounting, and regulatory standards, he wrote in an editorial in the Washington Post. In other words, a global super-regulator.
Brown and other European leaders have proposed "guiding principals" for this new international system. Its hallmarks, according to Brown, are transparency, sound banking, responsibility, integrity, and global governance.
World leaders need another Bretton Woods agreement, an accord that created the International Monetary Fund and World Bank at the end of World War II. But those institutions are now outdated, Brown argues.
If world leaders create new international rules, he asserts, this year will be "remembered not just as the year of financial crisis, but the year we started to build the world anew."
The push for new worldwide rules may already have momentum, although actually accepting them is far from certain.
President George Bush, French President Nicolas Sarkozy, and European Commission President Jose Manual Barroso are urging world leaders to join them for a Bretton Woods II meeting after the U.S. elections.
American government officials say they're open to ideas but hinted they'd oppose strong powers for a global regulator.
European talk for a new world order is already drawing criticism. Europeans are eager to show their clout by forcing their plan for over-regulation on Americans, writes Irwin Stelzer, director of economic policy studies at the Hudson Institute, a think tank in Washington, D.C.
Individual nations must be able to opt-out of global rules if their particular circumstances warrant it, Stelzer wrote in an op-ed in London's Sunday Time.
The European plan calls for regulating all sorts of financial areas, like hedge funds and executive pay, but it doesn't mention promoting financial services innovation, Stelzer wrote.
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