G8 to Meet on Global Bank Reforms

The heads of the G8 major industrialised nations have agreed to hold a summit with emerging states to reform the world's banking system in the face of the global credit crisis.

The US, UK, France, Italy, Germany, Canada, Japan and Russia said that co-ordinated reforms had to be made to the "regulatory and institutional regimes for the world's financial sectors to remedy deficiencies exposed by the current crisis".

Wednesday's joint statement said:

"We look forward to a leaders' meeting with key countries at an appropriate time in the near future to adopt an agenda for reforms to meet the challenges of the 21st century."

Gordon Brown, the British prime minister, who was attending a two-day summit of European Union (EU) leaders in Brussels, said the global summit could be held as soon as November.

Brown said the summit should involve the United States, European nations and emerging economies such as China and India.

He said the summit would discuss increased international financial regulation and would also aim to relaunch stalled global trade talks.

Nicolas Sarkozy, the French president, who was chairing the talks in Brussels, also announced that all 27 EU leaders had agreed to back a plan to shore up the banking sector agreed to on Sunday by Britain and the 15 countries that use the Euro.

The measures include increasing a guarantee on European bank deposits to $136,760 to be implemented within the next 12 months.

International regulation

Ahead of the G8 statement, Brown had called for such a meeting to discuss reform of the international financial system, including the Washington-based International Monetary Fund (IMF).

Brown said: "I believe there is scope for agreement in the next few days that we will have an international meeting to take common action... for very large and very radical changes."

The prime minister said an overhaul of global financial bodies like the IMF and the creation of better rules governing financial markets were "urgently needed so that we can restore confidence" in the global financial system.

He said: "The IMF has got to be rebuilt as fit for purpose for the modern world. We need an early warning system for the world economy."

Brown said creating a new international financial architecture should be "an immediate task" to restore confidence in markets.

He said he wants a group of supervisors from major nations to monitor the world's 30 largest financial institutions.

"We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision," Brown said.