Brown resolute in face of Bear Stearns crisis
Monday, 17 March 2008 12:00 AM
Gordon Brown has renewed his pledges of "resilience" after the Bank of England was forced to make an additional £5 billion available on the money markets.
Updating the Commons after his latest meeting with European Union leaders, the prime minister said all necessary steps were being taken to respond to US bank Bear Stearns' unexpected collapse.
It is to be sold to its rival JPMorgan Chase for just $2 a share after it sought emergency central and private funding on Friday.
The development shocked global markets into sharp falls in today's trading. The Nikkei closed down 3.7 per cent, the FTSE closed down 3.9 per cent and the Dow Jones slipped 1.5 per cent in its first 15 minutes alone.
In addition to the Bank's move the Federal Reserve pledged to fund up to $30 billion (£14.8 billion) of Bear Stearns' less liquid assets, prompting fears from analysts central banks' actions may be beginning to distort the market.
Mr Brown insisted the government was doing its utmost to ensure stability in the wake of the Bear Stearns crisis.
"While our economy is resilient and fundamentally strong, we will at all times remain vigilant and particularly at this time of global uncertainty will continue to take whatever action is necessary to maintain economic stability and growth," he said.
The prime minister said EU states had universally agreed on the need for "greater transparency" in the money markets around the world.
He said chancellor Alistair Darling was writing to the G7 to seek agreements for "coordinated international action" on transparency and disclosure.
"Given the globally transmitted nature of the risk, it is clear that many of these changes. can best be implemented at a global level," he explained.
Newsletter sign up