Reform of the world's financial system requires a global approach and countries cannot act in isolation to deal with a crisis caused by uncontrolled international speculation, the United Nations said today.
The United Nations Conference on Trade and Development (UNCTAD) said the UN had the most credibility to adopt that approach, as developing countries had a limited voice in other institutions.
The call for a UN-led approach comes as major rich and poor countries prepare for a series of meetings to review the architecture of the world's financial system.
In an inter-dependent world where financial markets are linked electronically, no country can act in isolation, the conference, whose analyses of developing country economics are closely followed by investors, said in a policy brief.
"It's simply not possible today for all countries to generate current account surpluses or improve their international competitiveness simultaneously by devaluing their currency or cutting costs," it said. "One nation's advance is another's retreat."
Global cooperation and regulation were necessary in finance just as international trade in goods required a predictable rules-based system, it said.
"The failure of governments to pursue such an approach is the primary reason for the current global predicament," it said.