Stephen Foley - 12 November 2008

For the Prime Minister, Gordon Brown, it is a “new Bretton Woods”, as important as the 1944 convention that established the modern financial world order. For Nicolas Sarkozy, President of France, it is a once-in-a-lifetime chance to remake the global financial architecture and usher in an era of “regulated capitalism”. But beware the headlines that these leaders try to manufacture when they assemble for their credit crisis summit in Washington this weekend.

What we have is a summit without an agenda, on a crisis without an agreed cause, in a country without a functioning government. The US – whose outgoing President agreed to hold the meeting under French pressure, and whose President-elect, keen to stress that the US has “only one president at a time”, won’t even be there – has already bristled at European talk of a creating new supra-national regulators and international rules.

So little wonder everyone else is scrambling to downplay expectations for what might emerge, and to lengthen the timetable for achieving results. As one person from the UK delegation put it, “Bretton Woods took two years”.

Bretton Woods created the International Monetary Fund, which endures as the one international body powerful enough to prop up governments and economies that run into trouble. It also created a system of fixed exchange rates that failed to endure into the Seventies. Today, despite a financial crisis that is agreed to be the worst since the Great Depression, little yet under academic discussion rises to the level of ambition on display in the New Hampshire mountains in 1944. Certainly, nothing likely to be on the table on Friday and Saturday rises to that level.

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