The subprime meltdown is likely the worst global financial disaster in a long string of crises, but the world should draw from it important lessons on how to mitigate the damage from such events in the future, said former prime minister Paul Martin on Monday.

Speaking at a conference in Toronto focused on the subprime mortgage crisis and its global impacts, Martin said crises are an unavoidable reality within the financial system.

“The subprime debacle is clearly the worst,” Martin said, comparing it to such events as the Asian financial crisis, the Russian default and the Mexican peso crisis.

But what sets apart the current credit crisis, in particular, Martin said, is the extent to which U.S.-born problems have impacted countries around the world: “What is new is the interconnectedness of world financial markets today.”

Martin said he has no doubt markets will recover from the current crisis, but before global markets move on, he said it’s crucial to address this interdependence in preparation for similar events of the future.

“If the financial markets are so seamless, that few in the industrial world can escape the consequences of the collapse of the U.S housing system, what will happen when a similar problem arises in China or India?”

At the core of the problem with the global financial system is the lack of participation of emerging economies in international institutions, and in particular, the G8, said Martin.

“When the G7 was formed in the 1970s, its members were the world’s most powerful economies. They no longer are,” he said “It’s no longer sufficiently representative.”

Martin said until global financial institutions give a voice to such powerful economies as China, India and Brazil, these organizations will be unable to effectively address problems in global financial markets.

“[The G8] must be expanded to include new centres of power and influence,” he said.

Martin added that this issue is likely more important for Canada than any other country in the world, given its widespread global integration.

“No one is as integrated into the world economy as we are,” he said.