German Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday threw their weight behind a call from British Prime Minister Gordon Brown for sweeping change in global financial institutions, while the European Commission proposed to double bank-deposit insurance to 100,000 to boost confidence in banks hit by the worst financial crisis since the Great Depression.

Elsewhere, non-European Union countries battled to get a handle on their own troubles from the crisis, with Iceland and Norway cutting interest rates and Russia closing its stock markets, while Ukraine received a delegation from the International Monetary Fund.

Brown has been the standard bearer of reform among the world's financial institutions for years and he repeated his call yesterday for global talks this year.

Merkel and Sarkozy said they backed his call for stronger international supervision of the global financial system.

All EU governments started two-day talks that will see them follow a rescue plan by eurozone nations and Britain on what they should do to shore up their financial system and try to prevent a banking crisis slowing down an economy verging on recession.

Under the plan's broad principles, the 15 countries that use the euro currency and Britain put up a total of 1.7 trillion (about £1.5 trillion) in guarantees and emergency aid to help banks.

The joint action, along with broadly similar US plans that include using public money to take stakes in big banks, helped stop severe falls in world stock markets earlier this week. But credit markets remain in distress, with fearful banks willing to lend to each other only at abnormally high rates, and that makes credit harder to get for businesses and consumers.

Brown called for a reshaping of the International Monetary Fund as the keystone of global market regulation and an early warning system for the global economy.

Brown, whose rescue plan for British banks established a template for Europe and the United States, said: "If we are going to sort out global financial problems that are recognised to be global, we need better ways of doing this."

The prime minister, who also held talks with European Commission President Jose Manuel Barroso, added: "The International Monetary Fund has got to be rebuilt as fit for purpose of the modern world."

The IMF was born of the 1944 Bretton Woods agreement, that set out international economic co-operation intended to avoid repetition of the 1930s Great Depression.

Its purpose is to ensure stability of the world monetary system, provide advice to its 184 member states and extend financial help where necessary.

But since 1944, the world economic landscape has changed almost beyond recognition.

In the latest sign that global recession could follow hard on the heels of the credit crisis, new British figures showed unemployment jumping to 5.7% at its fastest pace since 1991, with experts predicting worse to come.

Meanwhile, the 100,000 bank insurance measure would require European Union nations to increase their guarantee within a year to at least that amount, a five-fold increase over the floor in force eight days ago.

EU finance ministers raised the minimum to 50,000 last week. The move is part of a series of steps to shore up the banking system. EU governments have committed $2 trillion to guarantee loans and buy shares in banks.

Deposit insurance came into sharp focus after the September 2007 run on the Northern Rock bank, forcing the UK to revise its guarantees, and two weeks ago as customer withdrawals helped spur a rescue of the Fortis banking group of Belgium.