Cooperation amongst international financial institutions has failed to ward off the worst financial crisis in decades and a new charter should be forged, German Chancellor Angela Merkel told the World Economic Forum in this Swiss ski resort. "This may even lead to a U.N. Economic Council, just as the Security Council was created after the Second World War," she said.

While she spoke, business leaders and financial policymakers met behind closed doors at Davos to lay the groundwork for new regulatory structures and seek consensus on shaping a global response to the economic and financial shocks.

British Prime Minister Gordon Brown, who is spearheading global financial reform as chairman of the Group of 20 leading developed and emerging economies, said bold action was needed to get banks lending again and repair the financial damage. "We are prepared to consider radical options. The old ways have not worked. We've got to rebuild the financial system,"  he said.

In a discussion with UK Chancellor of the Exchequer Alistair Darling, the U.S. Treasury said: "They agreed that significant international action is necessary for global growth to regain its footing."