Still More Financial Crises on the Way, Warns Brown; LEADERS URGED TO AGREE ON BINDING PACTS ON REGULATION

Western Mail (Cardiff, Wales), May 17, 2011 | Go to article overview
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Still More Financial Crises on the Way, Warns Brown; LEADERS URGED TO AGREE ON BINDING PACTS ON REGULATION


Byline: DAVID WILLIAMS

THE global financial collapse of 2008 may just be the "trailer" to a series of devastating international crises, former Prime Minister Gordon Brown has warned.

Writing in the American Newsweek magazine, he said that three years on, the world financial system remained "perilously unregulated".

Mr Brown called on world leaders to come together and draw up a new series of binding agreements to deal with the issue.

But leading Welsh economist Patrick Minford warned excessive regulation which hurt the UK banking sector could make the chances of another crisis even more likely.

Mr Brown said: "If the world continues on its current path, the historians of the future will say that the great financial collapse of three years ago was simply the trailer for a succession of avoidable crises that eroded popular consent for globalisation itself.

"The global flows of goods, services and capital create global problems that can be answered only by global solutions and by a consensus between world leaders to reach binding agreements for the good of all nations."

Mr Brown also stressed the need for Western countries to prepare their populations for the impact of the economic rise of Asia if they did not want to see millions thrown into unemployment and poverty. "Re-equipping Western work-forces for the opportunities presented by Asia will be the pre-eminent challenge of this decade - and neglecting investment in our human capital base will condemn millions of people in the West to long-term unemployment and poverty."

At the same time, he stressed the need for "global support" for the unemployed of the Middle East and Africa, if they want to avoid creating fresh problems of immigration and insecurity.

"Global growth will be far lower than it otherwise needs to be, unless the world begins to understand that there is no solution to financial instability, diminished trade and mass unemployment without a global deal for jobs and justice," he said.

Cardiff University's Professor Minford agreed that further financial storms may be ahead but warned of the dangers of more red tape.

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