Page last updated at 15:09 GMT, Tuesday, 29 September 2009 16:09 UK

Brown says markets 'need morals'

Gordon Brown on the failure of markets that were "not just free but values-free"

Prime Minister Gordon Brown has said financial markets need "morals" if they are to function properly.

Speaking at the Labour conference in Brighton, he defended the government's handling of the financial crisis and stressed his economic credentials.

He vowed that the banks that were bailed out would pay back taxpayers.

And Mr Brown said the government would pass new rules covering bankers' behaviour, including disqualifying those unfit to run banks.

"Any director of any of our banks who is negligent will be disqualified from holding any such post," he said.

Earlier this year, Financial Services Authority chief executive Hector Sants said the regulator was "committed to holding senior managers to account" and had fined or prohibited a number of directors where there had been evidence of "culpable misconduct".

"This financial crisis has demonstrated that we can no longer rely on senior management judgements," Mr Sants said in a speech in May.

New rules

Gordon Brown also told the Labour conference: "Markets need what they cannot generate themselves; they need what the British people alone can bring to them, I say to you today; markets need morals."

Governments in the UK, US and other nations have been debating how to reform banks after several almost collapsed and brought down the global financial system last year.

Mr Brown and Chancellor Alistair Darling have said that banks should be able to "claw back" bonuses if they later suffers losses, and that bonuses should be deferred.

"We will pass a new law to intervene on bankers' bonuses whenever they put the economy at risk," Mr Brown told his party in Brighton.

Under new Financial Services Authority rules scheduled to take effect in January, bonuses will not be guaranteed for more than a year and will have to be spread over three years.

The new rules are designed to link pay more closely with the long-term profitability of banks.

The prime minister also vowed to create a new £1bn national investment corporation to "provide finance for growing manufacturing and other businesses".

Print Sponsor

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific