Finance & Business World

Prime Minister Gordon Brown will meet with Bank of England Governor Mervyn King today to discuss how the U.K. should implement new financial rules laid out by leaders of the Group of 20 nations last week.

Financial Services Authority Chairman Adair Turner, Chancellor of the Exchequer Alistair Darling and Trade Minister Mervyn Davies also will attend, a spokeswoman for Brown said. He also plans to meet with commercial bank executives.

“Our first priority” is “getting the economy onto a growth path, recognizing that it’s a global recession and that we have got to cooperate with other countries,” Brown said yesterday on Sky News television. “I am going to call the banks in, and the governor of the Bank of England is coming to see me on Monday.”

World leaders including President Barack Obama and China’s Hu Jintao agreed to impose tighter controls on banks and hedge funds and to require institutions to set money aside for bad times. Brown, who enjoyed a popularity boost in a poll conducted after he hosted the summit in London, wants to act on the G-20 promises to help curtail the recession in the U.K.

Support for Brown’s Labour Party gained three points to 31 percent in a YouGov Plc poll conducted in the two days following the G-20 summit. That narrowed the Conservative opposition’s lead over Labour to seven points, the least in three months.

Brown also wants to prod commercial banks into returning lending to 2007 levels. Banks are writing about a third of the mortgages they approved each month two years ago even after tapping the government for 40 billion pounds ($59 billion) of support, according to Bank of England data.

‘Still Very Weak’

“Credit availability remains poor, bank assets continue to shrink and housing activity is still very weak,” Michael Saunders, chief Western European economist for Citigroup Inc., wrote in a note to clients on April 3. “The conditions for recovery are not yet in place.”

Darling’s annual budget statement is due April 22 health insurance quote. Yesterday the chancellor said the recession had been worse than he expected in November, suggesting the deficit will be wider than the 118 billion pounds expected by the Treasury. That would limit Brown’s ability to use government spending to bolster economic growth before the next election, due by mid-2010.

While Brown’s actions on the global stage may have impressed some voters, Britain this weekend resisted ceding regulatory powers to the European Union.

The U.K. rejected a plan suggested by the bloc’s finance ministers over the weekend to give the two new agencies the authority to overrule national banking and insurance regulators. Britain also resisted a push for the European Central Bank to run a panel monitoring risks to the economy of the 27-nation group.

Constraints for ECB

“The ECB clearly has an important role to play in strengthening and enhancing macro-prudential supervision, but the precise role has yet to be determined,” U.K. Financial Services Secretary Paul Myners said on April 4 at a meeting of ministers in Prague.

Darling last month said he won’t accept giving the new agencies power that would bind the actions of the U.K. Financial Services Authority.

“The British have a somewhat different view,” Dutch State Secretary of Finance Jan Kees de Jager said in an interview in Prague. “We hope that in the next couple of weeks these hesitations will be overcome.”

Brown sees the G-20 regulatory overhaul as necessary to restoring people’s confidence in the banking system and a step toward reassuring businesses about the availability of credit, the prime minister’s spokeswoman said.

The prime minister also will write to the U.K.’s overseas territories and crown dependencies, urging them to open now- secret tax arrangements to scrutiny in step with G-20 demands, the spokeswoman said.

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