No Bretton Woods II from global market revamp

By Huw Jones - Analysis

BRUSSELS (Reuters) - No "Bretton Woods II" will emerge from efforts to apply lessons from the credit crunch, and bickering over who gets a seat at the bigger global regulatory table may hamper even modest reform efforts.

British Prime Minister Gordon Brown and French President Nicolas Sarkozy have called for a reshaping of how markets are managed, akin to the founding in 1944 of the International Monetary Fund and World Bank in the U.S. town of Bretton Woods.

The G20 meeting in Washington last month kicked off the revamp effort with the next meeting in London in April and EU finance ministers will also take stock on Thursday.

Policymakers, central bankers, supervisors and bank industry officials say an evolutionary rather than revolutionary process is under way.

"Individual nation states will want to go their own sweet way," said Charles Goodhart, a past member of the Bank of England's monetary policy committee. He described calls for a Bretton Woods level of reform as just "political theater."

Discussing the scope of needed reforms in a speech last week, Financial Stability Forum (FSF) Director General Svein Andresen said: "Supervisory resources will need to expand and supervision may well need to become more intrusive than it has been in a number of jurisdictions."

However, although many details have yet to be thrashed out as much could hinge on what incoming U.S. President Barack Obama wants to do, it is clear that the FSF will itself become the chief focus of the change. The FSF is made up of central bankers, regulators and treasury officials mainly from the G7 countries,

"The changes being worked on are a way to give more legitimacy to the FSF which will have the task of producing recommendations and the IMF will be responsible for seeing they are implemented," a euro zone monetary source said.