The European Union is Pushing to Overhaul the Post-World War II Financial System.



European Union leaders pressed for an overhaul of the global financial system to prevent a repeat of the credit crunch that sparked the biggest stock-market selloff since the Great Depression.



EU leaders called for a global summit as soon as next month to rewrite the 1944 Bretton Woods accord that paved the way for Europe's post-World War II reconstruction and set up the institutions that oversee the world economy today.



"We had the emerging market crisis, we had the Internet bubble, now we have this massive crisis," French President Nicolas Sarkozy told reporters after chairing the first session of an EU summit late yesterday in Brussels. Europe insists on the "re-foundation of the international financial system."



U.K. Prime Minister Gordon Brown, author of the British bank- bailout plan that was copied across Europe and in the U.S., called for an end-of-year deadline to place each of the world's top 30 banks under the supervision of a panel of regulators from the countries where it is active.



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



Treatment of tax havens such as the Cayman Islands and Monaco may be overhauled as part of any new global financial framework, Sarkozy said.



"It will be part of discussions Saturday in Washington," the French leader said. "Will we continue to work with tax havens? It's a valid question. We've passed into a new era. It's a question we'll put on the table and immediately."



"There needs to be a new Bretton Woods," Italian Prime Minister Silvio Berlusconi said. "The consensus is very strong and it keeps growing stronger."



The European initiative is likely to face headwinds from the U.S., which has used its dominance of international financial institutions to promote a brand of capitalism that has come into at least temporary disrepute.



"The U.S. got what it wanted in 1944 and, I suspect, will do so again simply because the Europeans won't be able to decide what they want," said Martin Weale, director of the National Institute of Economic and Social Research in London.

Trichet Urges Return to 'Discipline' of Bretton Woods

European Central Bank President Jean- Claude Trichet said officials reshaping the world's financial system should try to return to the "discipline" that governed markets in the decades after World War II.



"Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline," Trichet said after giving a speech at the Economic Club of New York yesterday. "It's absolutely clear that financial markets need discipline: macroeconomic discipline, monetary discipline, market discipline."



At Bretton Woods, nations agreed to fix exchange rates, establish the International Monetary Fund and start the process of rebuilding Europe's economy in the aftermath of World War II by encouraging coordinated economic policies. Brown said national regulators must coordinate their work and banks should be pushed to disclose more trading positions.



"If we don't have discipline, then we are putting into question the functioning of the market economies and the functioning of our financial markets," Trichet said.



At Bretton Woods, nations agreed to fix exchange rates, establish the International Monetary Fund and start the process of rebuilding Europe's economy in the aftermath of World War II by encouraging coordinated economic policies. Brown said national regulators must coordinate their work and banks should be pushed to disclose more trading positions.



"If we don't have discipline, then we are putting into question the functioning of the market economies and the functioning of our financial markets," Trichet said.

Gold's Honest Discipline