Ambassador: Financial System Needs Overhauling

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Britain's Prime Minister Gordon Brown will be among the important players at the G-20 summit looking for ways to reverse the global economic downturn. Britain's ambassador to Washington, Sir Nigel Sheinwald, tells Ari Shapiro that the group needs to work on some sort of economic stimulus and overhaul the world's financial system.


Leaders from the world's biggest economies are gathering in Washington this week to tackle the global economic crisis. Britain's prime minister, Gordon Brown, will be among the key players at the Group of 20 summit. We spoke with Brown's ambassador to Washington, Sir Nigel Sheinwald, about what this gathering might produce.

Sir NIGEL SHEINWALD (Britain's Ambassador to the United States): Good morning.

SHAPIRO: Britain, the U.S., and China have all thrown massive sums of money at this problem, and yet the global problems persist. What more can be done?

Sir SHEINWALD: Well, I think we need to show that there is a global consensus emerging. And I think the focus will be on stabilizing the situation, but then moving on from that to talking about the need for stimulus, number one. Number two, to look at the international financial system itself, the architecture of how the world is governed financially, which we think needs to move on and to represent the 21st century.

SHAPIRO: Do you think this G-20 summit could be the beginning of a comprehensive restructuring of the global financial markets? And if so, what might that look like?

Sir SHEINWALD: Well, I think it could be the beginning. I don't think we should have exaggerated expectations of what can come from one meeting, and I think we're expecting this meeting to be followed up by a number of others. So, yes, I think there's a possibility. I think there are a number or areas for it. To give a couple of examples, the International Monetary Fund needs a new role. It needs to be given a more clearly defined role in relation to early warning to all our governments of a coming crisis.

SHAPIRO: Do you mean a smaller role?

Sir SHEINWALD: No. A bigger role. An expanded role to deal with that. The IMF also has a big role in helping the fragile economies around the world - the developing countries, the emerging markets in the Far East - preventing contagion from the crisis we've had to them.

SHAPIRO: When Prime Minister Brown is here in the U.S., does he plan to meet with Obama transition team officials?

Sir SHEINWALD: I don't think there are any plans for that. He'll be meeting with the other leaders of the G-20. He's had the opportunity over the past week to speak personally to President-elect Obama and Vice President-elect Biden, and I'm sure that his own team from 10 Downing Street will remain in close touch in the weeks ahead.

SHAPIRO: How influential do you think the Bush administration can be, given that there are only two months left?

Sir SHEINWALD: Well, we all know this comes at a difficult moment in your transition here. But this is important to have this meeting. We're not in any way saying that the timing is wrong. This administration has been involved with this right from the start, from the summer of last year. So those contacts are going to remain important right up until the 20th of January.

SHAPIRO: So do you think this is as much about the show of solidarity and the appearance of getting together and doing something about the problem as it is about the actual decisions that are made and how to address the problem?

Sir SHEINWALD: I think it's both. And I hope that it'll be possible in the final days leading up to the summit itself to ensure that both are part of the outcome because there is a good deal of detail that people have been talking about on the regulation and supervision of financial markets which, if the leaders agree, is ready to roll. An example of that would be that for a long time now, we've been talking about having international colleges of supervisors for maybe 30 of the world's big multinational financial institutions, so that it wasn't left just to one country to supervise an organization or a firm. You would pool experience and pool the supervisory responsibility in a more coordinated fashion.

SHAPIRO: Sir Nigel Sheinwald is Britain's ambassador to the U.S. Very good talking with you, Ambassador Sheinwald.

Sir SHEINWALD: Thank you.

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