EU ministers press for greater transparency from financial markets

Business Materials 13 September 2008 20:32 (UTC +04:00)

The European Union's finance ministers Saturday piled pressure on banks and insurance companies to provide greater transparency in the wake of the global financial turmoil.

At an informal meeting in the French seaside city of Nice, ministers said "measures designed to restore confidence through transparency and the responsibility of the actors will be put in place without delay."

The EU's internal market commissioner, Charlie McCreevy, is due to unveil a set of proposals aimed at improving the transparency of financial market operators in October.

Though details are as yet unclear, the proposals are expected to include a set of requirements for credit rating agencies wishing to operate in the EU.

In Nice, German Finance Minister Peer Steinbruck said his government backed plans by France, the current holder of the EU presidency, to improve cooperation between national agencies which supervise banks and insurance companies.

His French colleague, Christine Lagarde, said 80 per cent of banks had so far complied with the EU's disclosure requirements.

While noting that transparency was "improving", Lagarde said "we need to reach 100 per cent."

The Nice meeting was also attended by the governor of the Italian central bank, Mario Draghi, who also chairs the Financial Stability Forum, which groups central bankers and regulators from the world's leading economies.

Draghi was reported on Friday as saying that the world's banks may need at least 350 billion dollars of fresh capital to counter the losses resulting from the global credit crunch sparked by the US subprime mortgage crisis. The figure was higher than previously thought.

US giants Lehman Brothers Holdings Inc. have become the latest victims of the credit squeeze.

Lehman's shares fell by 40 per cent on Thursday and by another 13.5 per cent on Friday after announcing its biggest ever loss on Wednesday, dpa reported.