Clinton urges global reform

President Clinton wants a world economic summit

President Clinton has called for an emergency fund to limit global financial turmoil in the face the worst crisis in half a century.

The proposal comes on the eve of the annual meetings of the International Monetary Fund and the World Bank, set to get into full swing on Tuesday.

Meanwhile, a meeting of the G7 finance ministers in Washington on Saturday said it was prepared to examine the proposal.

Rich nations, Mr Clinton stated, should support a fund which would be used to help the hardest-hit countries.

Clinton's plan

President Clinton called for a series of reforms to boost the stability of global markets, to restore investor confidence in developing countries, and to help crisis-torn countries solve their economic problems.

He also urged the US Congress to approve an increase in funds for the International Monetary Fund, saying that the US could not fulfill its global leadership role without paying its dues.

The request for $18bn has been stalled by the Republicans for the past year.

The president called for a three-point plan to prevent the recession spreading throughout the industrialised countries:

• The IMF should provide emergency finance to help countries ward off global financial contagion.

  This would mean giving money to countries in advance of a full-blown currency crisis.

  It is believed that Brazil is likely to request £50bn in the next few days for just this reason.

• Secondly, international loan guarantees to help solvent private companies in the developing world to stay afloat.

• Finally, boost exports to emerging markets by improving the loan guarantees that are offered by Western countries.

He is sending the head of the US Export-Import Bank, on a fact-finding mission to Argentina and Brazil.

Call to reform

Other world leaders have also been calling for reform of the international financial system.

UK Chancellor Gordon Brown supports greater transparency of the financial system and a new global architecture.

But reform efforts could be hampered by disagreements among Western leaders.

The French Government would like to move to a system of greater capital controls and managed exchange rates, and it is believed that the new German Social Democratic government might be inclined to support them.