Gordon Brown to Urge Barack Obama to Back Global Financial Reform Plans

Gordon Brown will today hold nearly two hours of talks with Barack Obama at the White House in a bid to persuade the US president that America needs to swing behind his planto reform international financial regulation and clean up the debt-ridden banks.

The prime minister also wants Obama's support for his proposal that countries who try to stay out of the new regulatory regime should be named and shamed on the basis such secrecy can destabilize the whole financial system.

Brown will attend around 45 minutes of talks in the Oval Office followed by a working lunch with the president and his officials.

Obama, in his first meeting with a European leader since becoming president, is not to stage a full scale joint press conference of the kind President Bush regularly afforded Tony Blair, even though has given Brown the significant honor of asking him to speak to both houses on Capitol Hill tomorrow.

The two men had been planning to hold a joint event in the White House rose garden today, but snow has forced Obama and Brown to meet media more informally at the start of their discussions in the Oval Office.

Obama's team pointed out the hectic president did not hold a press conference after meeting with the Japanese prime minister, Taro Aso, last week.

Brown and Obama were meeting against a backdrop of plunging share prices in Wall Street and Europe amid renewed fears that neither European Union nor American governments have been able to find a way to slow the slide into a depression or to clean up the banks.

The Dow Jones index had fallen below the 7,000 point level for the first time since 1997 and last week the US fourth quarter GDP figures showed an annual decline of 6.2%, the worst in 25 years.

Brown has laughed off suggestions that he is hoping Obama glamour will lift his standing in Britain. "I am here doing my job," he said.

The prime minister's officials admit they are still not clear how engaged the busy Obama team has been in the British-devised agenda for an international grand bargain to be outlined at the G20 summit in London on 2 April.

America in the past has been opposed to an intrusive international regulatory body such as a strengthened IMF, one of the main Brown proposals, but British officials believe Obama will quickly intellectually embrace the Brown new deal agenda, so long as it appears realistic.

Brown wants to double the IMF funding. He believes an international agreement on the way forward will do more than any single other action else to lift international confidence.

He is to tell Obama that major emerging economic powers of India and China need to be given fuller representation of the IMF and World Bank. In return, China needs to do more to adjust its exchange rate, reduce its trade surplus and lower its savings ratio. Brown has been struck that the savings ratio in China is 40% partly because the population has to hoard resources due to the lack of a national health service.

Brown is also proposing that the so-called shadow banking system be brought under international control and that the era of banking secrecy is ended. He believes attitudes have been changing very fast in the past few weeks, and thinks an outline agreement designed to close down tax havens will be agreed at the G20.

The prime minister does not appear to be in a mood to offer any admission that the British government bears any responsibility for the crisis, insisting this is a banking failure caused by lack of regulation in the US and the rise of sub-prime mortgages. Some of his cabinet colleagues have been urging him to admit some government culpability, arguing that his powerful reforms for the future will be ignored until he admits some responsibility for the past.

But Brown insists this is not a typical recession caused by a government allowing inflation to rear out of control, and is instead the product of the failure of the international regulatory system to stay abreast of globalisation.

He believes the lack of proper international regulation meant it was impossible for British authorities to realise that RBS was making a massive mistake in taking over the Dutch firm ABN Amro.

His position contrasts with the chancellor, Alistair Darling, who in an interview with the Daily Telegraph appears to have gone further in admitting the government had been too lax in regulating British banking – a point that has been made by the new chairman of the Financial Services Authority, Lord Turner, in giving evidence to the Treasury select committee last week.

Brown's team also disclosed that he will be traveling to Chile and Brazil in late March ahead of the G20.

On other international issues such as Iran, Russia, Afghanistan and Iraq, Brown believes he is on the same page as Obama, a huge relief after nearly eight years in which the British government has had to work alongside an often unpredictable and ideological Bush administration.

British officials are not expecting Obama to place any pressure on Brown to increase British troop numbers in Afghanistan. But Brown is to probe the extent to which the Obama administration is distancing itself from the Afghan president, Hamid Karzai and how vocally the Americans will prevent Karzai from staging early elections.

Obama's Afghan and Pakistan special envoy, Richard Holbroke, appears to want to see a powerful figure to be responsible for the coordination of aid and a stronger civilian government.