PM Meets Bush for Financial Crisis Talks

Gordon Brown is to fly to Washington today for emergency talks on the financial crisis with George Bush, giving him a chance to throw his weight behind the $700bn bail-out of Wall Street and put his case for reforms of international financial institutions.

Brown unexpectedly changed his itinerary after discussions with the White House, saying British families would want to know everything possible was being done to secure stability. The prime minister was in New York to attend the long-planned UN summit on the millennium development goals, but has increasingly found his agenda consumed by the turmoil in the markets, holding talks yesterday with leading Wall Street fund managers, Tim Geithner, the chairman of the New York Federal Reserve Bank, and even pulling together an informal summit of six world leaders in his hotel late on Wednesday night.

Brown is likely to meet Bush for about 40 minutes and is expected to use the meeting to discuss the US request for extra British troops in Afghanistan, as well as the diplomatic fallout from the Russian invasion of Georgia.

Insisting the Bush meeting had a practical purpose, Brown said: "While the problem comes out of America, it has consequences for all of us and every family will want to know that we are doing everything in our power to ensure that there is stability; and that is stability for people's jobs, for people's mortgages, for people's standards of living."

Brown, still suffering cabinet rumblings and poor polls, has been deploying his formidable knowledge of the financial markets to insist he is indispensable not just to his party but also the country.

Since flying to New York on Wednesday, he has been lobbying for major reforms of financial institutions, claiming he was winning support for his idea of stronger international regulation based on common rules and standards.

A report from the Swiss-based Financial Stability Forum - the premier international group of central bankers, finance ministries and regulators - is in line with Brown's thinking, also calling for some form of supervisory colleges for big global financial institutions.

Brown also wants reform of credit rating agencies, bigger responsibility on banks' boards, reform of the bonus system and greater transparency on transactions. "This set of events is making people realize that some of the things we proposed years ago, but we couldn't get consensus on, need to be done," he said.

He was not supporting every detail of the bail-out plan but endorsed the principle of buying out worthless assets to restore liquidity. He was careful not give a view on whether Congress should place a cap on compensation for Wall Street executives who lose their jobs.

Brown insisted that Britain was in better economic shape than the US: "What's happening to the housing market is different, because there is still demand for housing in Britain but no flow of money - America has overbuilt houses and they now recognize that," he said.

"But it's different in the sense that President Bush's plan is about dealing with a wide range of institutions ... We in Britain have a smaller number of institutions."