(BRUSSELS) - British Prime Minister Gordon Brown urged European leaders Wednesday to unite to tackle the underlying problems behind the financial crisis, declaring recent action had stabilised the markets.

In a press conference ahead of the start of a European Union summit here, Brown said what he called "phase one" of the crisis had been brought to a close but there was no time for people to rest on their laurels.

"I believe that stage one has been stabilisation of the financial system," said the British premier.

"I believe we must now move to stage two ... to make sure that problems that develop in financial systems, problems we know originated in America, do not occur again."

Brown said that it was time for a complete overhaul of global financial regulations and institutions, such as the International Monetary Fund (IMF), as the world's economy was now far more interdependent than ever before.

"The IMF has got to be rebuilt so it's fit for purpose for the modern economy," said Brown, speaking alongside European Commission chief Jose Manuel Barroso.

"It becomes obvious now that we are dealing with global financial markets... what we do not have is anything other than national or regional supervision."

In particular, there was a need for "proper disclosure and proper transparency ... and a proper early warning system," he added.

Brown, whose plan to part-nationalise a number of Britain's banks was largely emulated by countries in the 15-nation single currency eurozone after a weekend meeting in Paris, hoped the summit would "find agreement from the whole of Europe on what needs to be done."

Barroso meanwhile said it was important that Europe does not act in isolation but that "the US and Europe are facing together this situation and come with concrete proposals" to address the crisis.

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