US and UK in credit crunch meeting

Following the announcement in the UK that Northern Rock’s shares had fallen by 31 per cent, and Victoria had gone into administration, Brown admitted there was growing turmoil in financial markets, but he reassured the public that the economy was stable.

It has been speculated that proposals could be put forward to the International Monetary Fund, which regulates international financial systems. It was suggested that transparency in the global market needed to improve and the role of credit agencies be clearly defined.

Paulson said: “There is great vigilance now on the part of regulators, in terms of staying close to markets, as we work through this situation.”

Speaking at a meeting of EU finance ministers in Portugal, Darling added: “International action is needed to ensure that in the future we can reduce the risk of this sort of turbulence occurring again.”

However, Conservative leader, David Cameron, said the government had not done enough to calm public concern. Speaking to the BBC, he said: “The government has presided over a huge expansion of debt without showing awareness of the risks involved.”

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