Page last updated at 10:38 GMT, Friday, 30 January 2009

Brown urges global 'confidence'

Gordon Brown: 'It is time for the world to face the crisis as one'

World leaders must have the "confidence to act" to tackle the global recession, Gordon Brown has said.

Speaking at the World Economic Forum in Davos, the prime minister said 2009 had to be the year when the world "came together" to tackle the economic slump.

He called for "clear reforms" of the financial system to be agreed at the G20 meeting of leading economies in April to rebuild trust in banks.

Mr Brown also warned of the dangers of creeping protectionism.

'Urgent responsibility'

There was a real risk that if banks restricted lending to domestic customers only this would harm global trade and exacerbate the economic downturn.

"The thing we know about protectionism is that it protects nobody and least of all the poor," he said.

Mr Brown said political and business leaders had an "urgent responsibility" to rise to the economic challenges facing the world and that their "first priority" must be helping people worried about losing their jobs and livelihoods.

It is time for action and it is a time for having the confidence to act
Gordon Brown

Figures published in recent days suggest the global economy will barely grow at all this year and that the world is in its worst economic slump since 1945.

Mr Brown applauded action by the US and other nations to pump money into their economies, saying the world was being given its "largest ever fiscal stimulus" - equivalent to $1.5 trillion.

But he said national and international financial institutions must do more to help banks at risk of collapse.

And he said the international community must move quickly to reform the banking system to improve regulation and disclosure.

Mr Brown said real progress on this must be made at a meeting of the leaders of the G20 - a group of the world's leading economies - in London in April which he will chair.

"We have a choice what happens next," he said. "It is time for action and it is a time for having the confidence to act."

He added: "It is trust that we have to rebuild as a result of the credit crisis and the failure of the banking system."

At the same time, the world's leading countries must not use the global economic crisis to "renege" on commitments on global poverty and climate change, the PM warned.

But the BBC's Economics Editor Stephanie Flanders said there was some scepticism about whether the G20 would be able to act collectively even in the face of such a crisis.



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