Finance

Home page

Finance

EU countries talk over a package of proposals against financial crisis

05 November 2008 10:18 (UTC +04:00)

European Union finance ministers gathered on Tuesday to endorse reform of the G8 club of major industrialized nations and an end to self-regulation in global financial markets that critics say caused the credit crisis, Reuters reports.
"The time is coming, we can no longer trust self regulation on financial markets," Dutch Finance Minister Walter Bos told journalists on the sidelines of a meeting in Brussels to agree the EUâ€™s position for a Nov. 15 summit meeting of leaders from the G20 nations in Washington.
The finance chiefs from the 27-nation EU are gathered in Belgium to discuss a reform agenda proposed by France, which currently holds the rotating EU presidency, a draft of which was obtained by Reuters last week.
The document is key to formulating the EUâ€™s position for the G20 summit to apply globally the lessons learnt from the worst financial market crisis since the Great Depression of the 1930s.
The French plan would give emerging countries more say in global financial stewardship and increase the accountability of credit rating agencies, accounting rules-setters, banks and their top management.
The fundamental aim is to curb "short-termism" in financial markets, improve accountability and responsibility, anticipate risk better and increase transparency, the document said.
Reformers say it is essential for developing countries to take a bigger role in the global system, including the IMF.
The two are dominated by G8 members -- the United States, Russia, Japan, Canada, Britain, France, Germany and Italy -- even though a country like China now has a bigger economy than many of them.
Europe is also set to call for expansion of the Financial Stability Forum, a body consisting of regulators, central bankers and finance ministry officials from the G7 and other major economies, as well as international financial institutions and supervisory groupings.
Other proposals touch on oversight of big banks that straddle many national markets and on the internal workings of banks, where procedures to limit risk have been found wanting.
Policymakers have said products such as credit derivatives were devised and sold by banks without proper appreciation of the risks they contained. And Europe wants a code of conduct to curb financial incentives that lead to excessive risk taking.