November 06, 2008

European Union finance ministers have approved a set of proposals in advance of a global summit this month on strengthening the world's financial system. They called for improved supervision and tighter risk control mechanisms at banks and other large cross-border financial institutions. The ministers' ideas, adopted at a meeting in Brussels, stopped short of a root-and-branch reform of world capitalism, as suggested last month by Nicolas Sarkozy, French president.

But they amounted to a tactical success for France, the current holder of the EU's rotating presidency, and other states that contend that the global financial crisis was caused largely by a "frenzy of deregulation" over the past 20 years in the US, the UK and like-minded countries. The principles will be forwarded to a meeting on Friday of all 27 EU heads of government, who will shape them into a negotiating position for Europe at a summit of the G20 group of advanced industrial and emerging countries in Washington on November 15.