World credit loss '£1.8 trillion'

UK Prime Minister Gordon Brown has warned action is needed to prevent the current financial malaise spreading.

Mr Brown said the first priority was "to stop the contagion to other countries, including in eastern Europe" where there were "problems emerging".

He added the IMF would have to create a new fund to help struggling nations.

It comes as the Bank of England said the world's financial firms had now lost £1.8 trillion ($2.8 trillion) as a result of the continuing credit crisis.

It also warned that 1.2 million homeowners in the UK now faced going into negative equity if house prices continued recent sharp falls.

The Bank gave the figures in its latest bi-annual Financial Stability Report.

UK Prime Minister Gordon Brown has called on China and oil-rich states to contribute to an IMF bail-out fund.

The idea is that the International Monetary Fund would be able to offer "substantially more" than the $250bn that it has at the moment to fund countries hit by the downturn.

"We must act now, we must set up the fund as quickly as possible," Mr Brown said, adding that he would discuss it with Chinese and Gulf leaders later in the week.

'Fundamental rethink'

Warning that UK banks could now face stricter measures to avoid a repeat of the current credit crisis, the Bank said there may be "a need for a fundamental rethink of how to safeguard against systemic risk"

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Meanwhile, watch for global warming looming on the horizon...

At least with the "credit crisis", we can rethink the methods with which to con each other about money... I mean in the illusions of who has more of what cream puff...

With global warming, only hard ball understanding and action will save us...