Key European Leaders to Meet to Discuss Ailing World Economy.
European leaders will discuss greater transparency in bank operations and financial markets when they meet here Tuesday to consider a joint response to the global economic slump. British Prime Minister Gordon Brown is hosting French President Nicolas Sarkozy, German Chancellor Angela Merkel, Italian Premier Romano Prodi and European Commission President Jose Manuel Barroso for talks on the international credit crunch.
The meeting of Barroso and the European members of the Group of Eight industrialized nations comes before talks between finance ministers of G-7 countries on Feb. 9 in Tokyo. Leaders want a better international system for sharing information that can be used to help prevent future financial crises. Brown has felt the sting of the late summer credit squeeze that was caused by the collapse of the U.S. subprime mortgage market, with the first run on a British bank since 1866.
In France, authorities have uncovered the alleged largest-ever trading fraud by a single person. Trader Jerome Kerviel is accused of losing French bank Societe Generale around euro4.82 billion (US$7.09 billion). Merkel has said the German government is watching the situation but has cautioned against actions that could threaten jobs.
Brown has long called for greater transparency of bank operations in general. Merkel and Sarkozy want banks to be supervised on a European level. "There is a lack of openness, banks put rather too much off the balance sheet and people depend too much on credit rating agencies," Britain's Treasury Chief Alistair Darling told BBC Radio on Tuesday. "There is a case for proper supervision of banks."
Brown spokesman Michael Ellam said the group would also likely discuss the role of ratings agencies in financial markets. The EU has already asked European market regulators to look at why ratings agencies did not flag problems with subprime mortgages after ample evidence of mounting defaults from the second half of 2006.
In a joint declaration by Britain, France and Germany in October, the nations urged improvements to information available on securitized debt and illiquid assets, such as mortgages. The British leader last week called for reforms of the International Monetary Fund, saying it should be remodeled to act as a key scrutinizer of the world economy.
European Union spokesman Johannes Laitenberger insisted Monday that the work on reform is under way. "There is a road map for meeting the challenges on financial markets, we've been working on that in the autumn months," he said. "The fundamentals of the European economy remain very healthy."
European leaders will discuss greater transparency in bank operations and financial markets when they meet here Tuesday to consider a joint response to the global economic slump. British Prime Minister Gordon Brown is hosting French President Nicolas Sarkozy, German Chancellor Angela Merkel, Italian Premier Romano Prodi and European Commission President Jose Manuel Barroso for talks on the international credit crunch.
The meeting of Barroso and the European members of the Group of Eight industrialized nations comes before talks between finance ministers of G-7 countries on Feb. 9 in Tokyo. Leaders want a better international system for sharing information that can be used to help prevent future financial crises. Brown has felt the sting of the late summer credit squeeze that was caused by the collapse of the U.S. subprime mortgage market, with the first run on a British bank since 1866.
In France, authorities have uncovered the alleged largest-ever trading fraud by a single person. Trader Jerome Kerviel is accused of losing French bank Societe Generale around euro4.82 billion (US$7.09 billion). Merkel has said the German government is watching the situation but has cautioned against actions that could threaten jobs.
Brown has long called for greater transparency of bank operations in general. Merkel and Sarkozy want banks to be supervised on a European level. "There is a lack of openness, banks put rather too much off the balance sheet and people depend too much on credit rating agencies," Britain's Treasury Chief Alistair Darling told BBC Radio on Tuesday. "There is a case for proper supervision of banks."
Brown spokesman Michael Ellam said the group would also likely discuss the role of ratings agencies in financial markets. The EU has already asked European market regulators to look at why ratings agencies did not flag problems with subprime mortgages after ample evidence of mounting defaults from the second half of 2006.
In a joint declaration by Britain, France and Germany in October, the nations urged improvements to information available on securitized debt and illiquid assets, such as mortgages. The British leader last week called for reforms of the International Monetary Fund, saying it should be remodeled to act as a key scrutinizer of the world economy.
European Union spokesman Johannes Laitenberger insisted Monday that the work on reform is under way. "There is a road map for meeting the challenges on financial markets, we've been working on that in the autumn months," he said. "The fundamentals of the European economy remain very healthy."
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