Britain, France urge greater market transparency: joint statement
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Britain and France on Thursday pushed for greater transparency on the global financial markets, urging banks to make “full and prompt disclosure” about write-downs in the wake of the credit crunch.
In a joint communique issued after a summit here, the two countries said they would “address vigorously the current problems in the financial markets” after the crisis in the US subprime mortgage sector last year.
“We agreed the need for greater transparency in financial markets to ensure that banks make full and prompt disclosure of the scale of write-offs, including finding ways to give greater certainty on the valuations of complex financial assets,” it said.
“We also agreed on the need to reinforce risk management and improve the functioning of financial markets,” added the statement by Prime Minister Gordon Brown and President Nicolas Sarkozy.
The two countries have both been hit by the recent turmoil on the markets.
This year, Britain nationalised Northern Rock bank after it was forced to apply for emergency central bank loans.
Societe Generale incurred losses of 4.9 billion euros (7.5 billion dollars) when it was forced to unwind more than 50 billion euros of unauthorised deals in the unfavourable market conditions.
Brown and Sarkozy said further talks were needed with the United States and other countries to promote greater financial stability.
The topic should be on the agenda at the upcoming meetings of the G7 finance ministers in Washington and of the International Monetary Fund and World Bank, both leaders said.
They also reiterated their pledges to reform international institutions, including the IMF, to bring them more into line with the global status quo.
Filed by Anita Li under International Financial Architecture Reform, Financial Supervision, Corporate and Public Governance