Brown pledges no safe havens for banks to hide
Rogue countries which shelter banks from proper regulation face an unprecedented international crackdown, Gordon Brown revealed today.
Speaking exclusively to the Evening Standard as he arrived in Washington for his first White House summit with Barack Obama, the Prime Minister disclosed that he is pressing for moves to isolate and close "regulatory havens".
It could mean "naming and shaming" havens to make them too toxic for banks or companies to locate inside, despite the lure of lower costs and less red tape.
In the same interview, the Prime Minister hailed the Anglo-US relationship as "a partnership with a purpose" and praised President Obama as "a leader of vision" with whom he is already on good terms.
Mr Brown warned America against retreating into protectionist policies, saying worldwide economic recovery would require "commerce [to] flow across the world".
His two-day trip to the US capital was to start with around 45 minutes of private one-to-one talks with the President, expected to cover the economy, the military commitment to Afghanistan and the environment.
The pair were then having a lunch with advisers present and Mr Brown was going on to talks with vice-president Joe Biden. The White House downgraded a scheduled press conference, however, deciding the two leaders would make informal comments in the Oval Office instead.
Mr Brown said he was already getting on well with Mr Obama, who is due to come to London on 2 April for the G20 summit of major nations, hosted by Mr Brown. "I've enjoyed all my conversations with President Obama," he said.
"He's a leader of vision that the world recognises to be taking on one of the most challenging of times. We will be talking about how we can work together to achieve an economic recovery." Tomorrow, Mr Brown will address a joint session of Congress with a speech making the case for free trade and bold international action to stimulate the world economy.
The Premier believes that the economic crisis has created a unique window of opportunity for major economies to unite against a minority who leech off the world by offering tax and regulatory havens. "I think people will want to be sure that we don't have havens that can operate at the expense of the rest of the world and want to be sure that supervision of our banking institutions cannot be undermined by regulatory havens outside of our shores," he said.
The plan will be on the agenda at the G20 summit. It represents a major stepping up of the Prime Minister's pledge to "clean up the banks" and could extend the reach of regulators to the offshore "shadow banking" world of hedge funds and insurance-based instruments.
Mr Brown found that some Triple A-rated assets exposed as duds in the credit crunch were managed inside havens where regulators were denied access to information.
Tax havens are countries that offer strict banking secrecy, including Switzerland, Austria and Luxembourg, even from the tax authorities and police. Regulatory havens are nations that offer companies the opportunity to avoid global standards for reporting, governance, auditing, and openness.
Mr Brown will also press the President to sign up to action plans to tackle the global economic downturn, climate change and security issues.
The Prime Minister warned Americans not to pressure the President to adopt protectionist policies against imports and foreign jobs when, he said, free trade was vital to the future growth of the world economy.
"I think we have common cause in wanting to see commerce flow across the world and not just to get us out of the downturn but to build prosperity for the years to come," he said.
Mr Brown was in combative mood, believing that he has no reason to take the blame for the economic crisis which, he insists, started in American banks and contaminated Britain and the rest of the world's financial system.
After gloomy opinion polls, his aides are desperate for the US trip to boost his standing at home.
