British Prime Minister Gordon Brown says insurance could play an important role in unlocking capital reserves and restoring world financial stability.

Speaking in New York last week while drumming up support for this week’s G20 summit in London, he said countries with high reserves, such as China, need some form of insurance policy to protect them while encouraging them to lend.

He wants insurance cover which guarantees action for these countries in the event of their currencies being devalued.

This would solve half the problem which has prompted China to suggest International Monetary Fund-activated special drawing rights to replace the US dollar as the world’s reserve currency.