UK Brown: Banks Must Be Servants Of Economies, Not Masters

UK Brown: Banks Must Be Servants Of Economies, Not Masters

LONDON (AFP)--U.K. Prime Minister Gordon Brown said Saturday banks must be reformed so that they are the servants of economies and societies rather than the masters.

In a comment piece set to be published in The Observer on Sunday, ahead of a summit of European leaders in Berlin on the global economic downturn, Brown called for a "reformed and more responsible banking system."

"Banks must act in the long-term interests of their shareholders and therefore of the economy as a whole, not in the short-term interests of bankers," Brown wrote.

"That has to be the foundation on which a new system must be based."

The prime minister advocated a rejection of "short-term bonus culture," stronger governance in banks, and better national and international regulation.

He warned, however, that there was "no room for parochialism or protectionism in our model of the future...We are not evacuating, but rather entrenching, our place right at the heart of global commerce, finance and trade."

Brown said that reformed banks in the U.K. would have to serve homeowners while promoting responsibility in the housing market and better support British start-ups.

"We want to ensure that the new banking system that emerges over the coming years meets all those requirements - and becomes the servant of our economy and society, never its master," he wrote.

The meeting on Sunday in Berlin will gather leaders from Europe's major economic powers.

German Chancellor Angela Merkel has called for rules governing financial markets to be reinforced and said measures must be decided for a united European position on the financial crisis ahead of an April Group of 20 summit in London.

Leaders from the 27-member European Union are also gathering March 1 to discuss the financial and economic slump that has left Europe in recession.