Page last updated at 17:45 GMT, Sunday, 1 February 2009

PM says 'no clear map' for crisis

Mr Brown called for a global regulatory system to prevent further problems

Gordon Brown says there is no precedent for the "first financial crisis of the global age".

History offered "no clear map" of how to deal with it, the UK prime minister told an audience at the World Economic Forum in the Swiss resort of Davos.

Mr Brown warned about the rising threat of protectionism and said that global co-operation was the only way forward.

"This is not like the 1930s. The world can come together," the prime minister said.

He told reporters: "This is the first financial crisis of the global age. And there is no clear map that has been set out from past experience to deal with it.

"I'm reminded of the story of Titian, who's the great painter, who reached the age of 90, finished the last of his nearly 100 brilliant paintings, and he said at the end of it, 'I'm finally beginning to learn how to paint', and that is where we are.

"We're learning all the time about how to deal with what are real problems for which we have no historical analogies to fall back on, because when the 1930s problems hit them, they did not have the global financial markets that we have today."

This is a global banking crisis and you've got to deal with it for what it is, a global banking crisis
Gordon Brown

He said a "laissez faire" attitude was not permissible and added that "there is implicit protectionism I'm afraid in what is happening at the moment".

He called for co-operation and the rebuilding of "out-of-date" institutions such as the International Monetary Fund and the World Bank.

"This is a global banking crisis and you've got to deal with it for what it is, a global banking crisis," he said.

Global regulation

He said the solution did not lie in just nationalising banks and there was a need for a "global regulatory system" to ensure that such a crisis could be prevented in the future.

He also said there were far too many nations fearing an Asian crisis and holding on to far too many economic reserves.

The French finance minister, Christine Lagarde, warned there could be a real risk of more social unrest and protectionism unless measures were taken quickly to tackle the global economic crisis.

"I think it's a risk in Europe, it's a risk elsewhere as well, which is why I believe that time is really of the essence and we're working against the clock," she said.

Discussing the fall in the value of sterling, Mr Brown said that he still believed the UK's economy was built on "sound fundamentals".

Two weeks ago billionaire investor Jim Rogers urged others to take their money out of the British economy.

Mr Brown dismissed the calls and told the Davos audience: "It think it is very clear that we are not going to build policies around self-interested speculators."

He said the UK was making the decisions it needed to on issues such as planning, science, the environment and investing in skills.

He said: "I believe we are making the right decisions for the future."

'Reward hard work'

Focusing on the G20's second meeting on 2 April in London, he said the discussions would focus on global "interdependent" issues.

The UK will chair the financial summit and Mr Brown said nations that were not members would still be consulted beforehand and their concerns would contribute to the dialogue.

BBC News diplomatic correspondent Bridget Kendall said Mr Brown was frank that there were no "ready solutions".

She said: "He admitted he and others had mistakenly believed global financial markets would spread risk - instead they'd helped spread contagion.

"He said the only way to restore trust in banks was to establish new global principles that rewarded hard work and enterprise but not what he called 'short term ridiculous risk-taking'."

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