UK summit calls for transparency

 

The meeting comes amid the continuing fallout from the crisis on the US sub-prime mortgage sector last year that saw a squeeze on the global credit markets.

The market turmoil, which triggered an emergency 75 basis point rate cut by the US central bank last week, has been compounded by a rogue trader scandal at France’s bank and the near collapse of Britain’s Northern Rock.

“Financial markets globally have suffered a prolonged period of turbulence triggered by the sub-prime crisis in the United States which spilled over into other financial markets,” the leaders said in a joint statement read out by Brown.

 

“Prompt and co-ordinated action has helped to ease the immediate problems, though there is no room for complacency.

 

“At this time of global uncertainty we need to signal our commitment to an open global economy” and believe “the fundamentals of the European economies remain sound”, the statement said.

 

The leaders called for better information on credit ratings and for better understanding, and reporting of banks’ exposure to risk following the sub-prime crisis.

 

 

Merkel warned that tighter regulation could result if institutions did not improve transparency.

 

The rogue trader scandal in France has compounded turmoil in global markets [AFP]

“The first step is the appeal to market participants to show more transparency and the important message is: if that doesn’t happen, then regulation will be needed,” she said. 

 

Earlier, Alistair Darling, Britain’s finance minister, rejected claims in London’s Financial Times that the talks could be “long on rhetoric and short on concrete outcomes, with disagreements among the leaders for the need for tighter regulation”.

 

But there was concern in Italy and France about the implications for the EU as a whole about a mini-summit involving only the leaders of the 27-member bloc’s four biggest economies.

 

Il Sole 24 Ore, Italy’s business daily, said it could lead to a “multi-tier” EU, with the major economies taking separate decisions.

 

Francois Hollande, the head of France’s Socialist party, told Europe 1 radio: “You don’t sort out such an important issue with just four people.”

 

Hollande said a meeting of all Europe’s finance ministers was needed.