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EU leaders back sweeping financial regulations
Associated Press
Issue date: 2/20/09 Section: News
BERLIN (AP) - European leaders backed sweeping new regulations for financial markets and hedge funds at a summit Sunday in Berlin as politicians and nations scrambled to tame the global economic crisis.
German Chancellor Angela Merkel hosted heads of state and finance ministers from Europe's largest economies to try to establish a common European position on economic reforms before an April 2 summit of the Group of 20 nations.
"All financial markets, products and participants including hedge funds and other private pools of capital which may pose a systematic risk must be subjected to appropriate oversight or regulation," Merkel said in a statement released on behalf of the summit members, following the talks.
Top officials from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and Czech Republic agreed on seven key points during their one-day meeting in Berlin, the statement said.
"A clear message and concrete action are necessary to engender new confidence in the markets and to put the world back on a path toward more growth and employment," Merkel said.
But the call for blanket global regulation was sure to be resisted by the financial industry and may not be welcomed completely by other members of the G-20, which in addition to European nations includes the United States, China, Japan and developing nations like India and Brazil.
European leaders backed Merkel's call for a "charter of sustainable economic activity" to reduce economic imbalances and stabilize financial markets.
The charter would subject all financial market activities around the globe to regulation, including credit rating agencies. Merkel said the charter would be "based on market forces but prevent excess and ultimately lead to the establishment of a global governance structure."
The leaders also agreed to strengthen the IMF and to support doubling its funds. British Prime Minister Gordon Brown said the IMF needs some $500 billion and called for a "global New Deal" to be adopted to help right the world economy.
"The IMF's resources must be doubled to enable it to help its members swiftly and flexibly when they experience difficulties with respect to their balance of payments," Merkel said.
Other key points included adopting sanctions to safeguard against tax havens and urging banks to keep larger reserves of capital.
Officials said a final copy of the summit agreement would not be circulated Sunday, in order to allow European Union members not present to view it first.
The ideas were based on an agenda adopted by the G-20 in November and will be taken up by the European Council on March 19-20, then presented to the G-20 meeting April 2 in London.
President Barack Obama and other top world leaders are scheduled to attend the London summit.
___
Associated Press Writer Michael Fischer contributed to this report.
Copyright 2009 The Associated Press.
German Chancellor Angela Merkel hosted heads of state and finance ministers from Europe's largest economies to try to establish a common European position on economic reforms before an April 2 summit of the Group of 20 nations.
"All financial markets, products and participants including hedge funds and other private pools of capital which may pose a systematic risk must be subjected to appropriate oversight or regulation," Merkel said in a statement released on behalf of the summit members, following the talks.
Top officials from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and Czech Republic agreed on seven key points during their one-day meeting in Berlin, the statement said.
"A clear message and concrete action are necessary to engender new confidence in the markets and to put the world back on a path toward more growth and employment," Merkel said.
But the call for blanket global regulation was sure to be resisted by the financial industry and may not be welcomed completely by other members of the G-20, which in addition to European nations includes the United States, China, Japan and developing nations like India and Brazil.
European leaders backed Merkel's call for a "charter of sustainable economic activity" to reduce economic imbalances and stabilize financial markets.
The charter would subject all financial market activities around the globe to regulation, including credit rating agencies. Merkel said the charter would be "based on market forces but prevent excess and ultimately lead to the establishment of a global governance structure."
The leaders also agreed to strengthen the IMF and to support doubling its funds. British Prime Minister Gordon Brown said the IMF needs some $500 billion and called for a "global New Deal" to be adopted to help right the world economy.
"The IMF's resources must be doubled to enable it to help its members swiftly and flexibly when they experience difficulties with respect to their balance of payments," Merkel said.
Other key points included adopting sanctions to safeguard against tax havens and urging banks to keep larger reserves of capital.
Officials said a final copy of the summit agreement would not be circulated Sunday, in order to allow European Union members not present to view it first.
The ideas were based on an agenda adopted by the G-20 in November and will be taken up by the European Council on March 19-20, then presented to the G-20 meeting April 2 in London.
President Barack Obama and other top world leaders are scheduled to attend the London summit.
___
Associated Press Writer Michael Fischer contributed to this report.
Copyright 2009 The Associated Press.
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