Duitsland, Frankrijk en VK bundelen krachten voor transparantie financiële markten (en)
The leaders of Germany, France and the UK have called for more transparency in financial markets, following concerns that the turmoil caused by the US housing crisis could hit growth.
German chancellor Angela Merkel, French president Nicolas Sarkozy and British prime minister Gordon Brown issued a joint declaration at the end of the EU summit on Friday (19 October) which stressed the need for more financial transparency in order to avoid a repetition of the current turmoil on global financial markets.
In particular, the three are in favour of better disclosure and exchange of information between the 27 EU members on complex financial instruments such as hedge funds. In addition, they called for more effective crisis management.
But they also cast doubts on whether European regulations would add value, stating that financial institutions and investors should take responsibility when managing risks, backed up by adequate national regulations.
"The primary responsibility for managing risk is, and must remain, with individual financial institutions and investors," the three leaders said, according to Forbes.
"This needs to be backed up by strong national regulatory frameworks. Regulatory authorities in different countries need to co-operate effectively across borders in exchanging information and in the management of crises and contagion," they added.
Nevertheless, they called on EU finance ministers to study whether regulatory or other actions were required and to present their conclusions during an EU summit next March.
Early warning system
Mr Brown also said that he wanted to have an early warning system in order to anticipate forthcoming financial crises and be better able to prepare for them.
He proposed that the Financial Stability Forum at the Bank of International Settlements could fulfil that role.
Going beyond the joint statement, President Sarkozy addressed the sensitive issue of state-owned investment funds.
"We've decided not to let ourselves be sold down the river by speculative funds, by unscrupulous attitudes which do not meet the transparency criteria one is entitled to expect in a civilised world," he said according to Reuters.
The issue is increasingly gaining the attention of policy makers with Saudi and Chinese state-controlled firms showing interest in buying up European firms.
According to Mr Brown, there is a consensus on how to deal with the matter so that greater transparency on state-owned funds - knowing what is invested and where - is more important than over-regulation and strict controls.