UK Prime Minister Gordon Brown is calling on the international community to build a bail-out fund. Crown copyright.

UK Prime Minister Gordon Brown has suggested that the international community may have to step in to provide resources in response to the global financial crisis.

Speaking to journalists in Downing Street today (28 October), the PM said that the International Monetary Fund’s (IMF) standard arrangement to provide up to $250 billion (£160bn) may not be enough to ease the credit crunch and restore confidence to international markets.

Countries should be prepared to provide more support, particularly countries such as China and those in the Gulf that have built up significant resources in recent years, he said.

The IMF is moving quickly to help emerging markets battered by fallout from global financial turmoil and the sharp slowdown in the economies of advanced industrialised countries. Over the past week, it has already been in talks with Iceland and Ukraine and is expected to set an agreement with Hungary within a few days.

It reached an agreement with Ukraine on 26 October to lend the eastern European country $16.5bn to help it combat a series of economic problems tied to the international financial turmoil and announced a broad agreement with Hungary on a set of policies designed to bolster near-term stability.

This closely followed an outline agreement with Iceland two days earlier to lend the island economy $2.1 billion through a two-year facility to support an economic recovery programme to help it restore confidence in its banking system and stabilise its currency.

Mr Brown said he had discussed his proposal with the IMF, German Chancellor Angela Merkel and French President Nicolas Sarkozy, whom he will meet for talks in Paris later today. The matter will also be raised on a tour of Gulf states this weekend and later with Premier Wen of China, he added.

Mr Brown said: “In the last few days I have discussed the risk of contagion and the need to stabilise economies right across Eastern Europe.

“It is clear that the whole of the international community must have an interest in stopping this contagion, to prevent the worsening of the global economic downturn. That is why it is vital that the international authorities – particularly the IMF – play a central role in supporting those economies at this time.

“It is in every nation’s interest and in the interests of hard-working families in our country and every country that financial contagion does not spread.”

The PM will also travel to the US in mid-November for a major international summit on the financial crisis to be hosted by President Bush.

For more information, visit: www.imf.org