Leaders Gather for Summit in Britain

Saturday, April 5, 2008 12:00 PM

WATFORD, England -- British Prime Minister Gordon Brown called the current global economic crisis the largest challenge of its kind in centuries on Saturday while addressing some of the world's key decision makers at a summit.

"We're facing the biggest financial crisis of the new era with what's happening in the financial markets," Brown said. "(It) is the biggest global economic restructuring I think we've seen since the Industrial Revolution."

Attendees at the center-left summit, including former President Clinton, also discussed climate change, international development and reform of international institutions, but the focus was on continued problems in the world economy.

Brown said the 20 leaders at the meeting supported his plans for the International Monetary Fund to become an "early warning system" for signs of trouble in the world economy so governments around the world can be made aware of any looming economic shocks.

"We can't allow the situation to emerge again," Brown said.

The world economy has been in a state of gloom since credit markets froze on fears of bad lending in the U.S. mortgage markets. International Monetary Fund chief Dominique Strauss-Kahn said conditions were unlikely to improve soon.

"The forecasts we are going to release in a few days are not really improving," Strauss-Kahn told those gathered at an exclusive country club on the outskirts of London. "Most of the downside risks identified six months ago have materialized."

He predicted a global growth rate of just 3.7 percent next year _ describing it as one of the lowest levels in the past two decades.

Strauss-Kahn said ongoing difficulties in the U.S. financial and labor markets continued to seep into other economies.

Much of the blame for the economic malaise has been pinned on reckless behavior by global financiers whose dealings have been obscured by opaque work practices.

"The need to have more transparency is obvious, correct and urgent," Clinton said.

Banks around the world have not been too forthcoming when asked to reveal the extent of their losses during the credit crisis and Austrian Chancellor Alfred Gusenbauer called on them to be more open in order for the economy to move forward.

"It's not good that week by week another bank is announcing its damage. This will prolong a process of distrust. There should be an hour of transparency where everybody is putting on the table what the real damage has been," Gusenbauer said.

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