Four European Nations Call For New EU Body To Supervise Banks

The leaders of Britain, France, Germany and Italy agreed Saturday to set up within the European Union a body to supervise banks as part of their efforts to stem the spread of the financial turmoil, triggered by the US subprime mortgage crisis, in Europe. The four released a statement after an emergency summit in Paris to deal with the financial crisis. The statement said mechanisms should be established within the European Union to oversee cross-border European financial institutions and enhance international cooperation. The leaders welcome the decision of the European Investment Bank to mobilize EUR30 billion of support for small and medium size European enterprises and urge the bank to frontload this effort. The four EU leaders didn't discuss concrete actions, but instead agreed on a set of principles. Among them: Keeping each other informed of measures to bail out banks, including slapping sanctions on the chiefs of failed banks. The leaders would consider ways to amend international accounting standards and lobby for a softening of European rules that ban state aid and monopolies. European Union budget rules regarding the deficit and debt limits allowed for members of the euro common currency could be loosened. The leaders present were French President Nicolas Sarkozy, German Chancellor Angela Merkel, British Prime Minister Gordon Brown, Italian Prime Minister Silvio Berlusconi [in addition to…] European Commission head Jose Manuel Barroso, European Central Bank (ECB) president Jean-Claude Trichet and the head of the Eurogroup, Luxembourg Prime Minister Jean-Claude Juncker. An international conference, on the financial crisis that would include the G8 countries and large developing economies such as China, India, Brazil and South Africa, was put forward. ‘We will work with all major economies to rebuild the international banking system,’ Berlusconi told journalists when asked about the purpose of the meeting of the so-called G14.