Darling appeals for new ideas on crisis
Chancellor Alistair Darling appealed on Friday for new ideas to tackle the global financial crisis, urging speedier international coordination and a shift in focus for the International Monetary Fund.
City responds to Darling's bonus criticismDarling and his Group of Seven counterparts are meeting in Washington this weekend to discuss the economic turmoil that has sent stock markets into a tailspin and left major banks throughout the world reeling.
"The world economy is changing. Sticking with the solutions of the past is not an option. Now, more than ever, we need new ideas," Darling wrote in the Financial Times.
He said the immediate priority for finance ministers from the world's richest countries was stability. Then they must discuss how to strengthen the system, with governments working together to get the financial system back on its feet.
"Markets cannot do this alone. Governments have to take the necessary action to enhance and maintain stability in the banking system," Darling wrote.
He said the European Union had made progress, agreeing on flexibility in applying state aid rules when governments step in to rescue ailing banks.
"But more action will be needed. I shall be discussing with other finance ministers how we can further build on these approaches," he said.
"The turmoil has underscored the need for further, speedier action, including on reviewing capital requirements, executive compensation structures that encourage irresponsible risk-taking, the finance system's procyclicality and improving cross-border cooperation."
Darling said the IMF needed to shift its focus towards surveillance of the links between the financial sector and the real economy.
"It will identify risks in advance, cooperate with the Financial Stability Forum to design policy and regulatory responses and strengthen links between ministers, in the Group of Seven and beyond, to ensure effective follow-up," he said.
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