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EU holds financial reform summit EU holds financial reform summit
(about 2 hours later)
EU leaders will meet in Brussels shortly to co-ordinate their approach to the financial crisis ahead of a global summit in Washington next week. A summit of EU leaders has opened in Brussels aimed at reaching agreement on ways to reform the global financial system after the recent market shocks.
The leaders believe there needs to be serious reform of the international financial architecture, the BBC's Jonny Dymond reports from Brussels. French President Nicolas Sarkozy, who called the talks, wants far-reaching reform proposals to take to a global summit in Washington next week.
He wants tighter financial regulation and says the IMF should play a key role in efforts to restore stability.
But there are strong disagreements about the degree of regulation needed.
Mr Sarkozy believes no financial institution, market segment or territory should escape supervision, including hedge funds.
He is chairing the talks as France currently holds the EU presidency.
But Britain and Sweden are warning that excessive regulation may stifle the financial market, while Germany is getting increasingly irritated by what it sees as France's attempts to run everything, the BBC's Oana Lungescu reports from Brussels.
Yet there is general support for Mr Sarkozy's call for concrete reforms to be worked out fast - within 100 days after the Washington summit on 15 November, our correspondent says.
That timescale could mean US President-elect Barack Obama would be involved in the proposed reforms.
Mr Sarkozy's five key proposals include the registration of credit rating agencies and codes of conduct to avoid huge bonuses for bankers and excessive risk-taking in the financial industry.
Smaller EU states, whose leaders will not go to Washington, will have a chance to air their concerns on Friday.Smaller EU states, whose leaders will not go to Washington, will have a chance to air their concerns on Friday.
There are some strong disagreements about the degree of regulation needed.
Some countries would like to see, in effect, a rewriting of the rules of the free market, while others think there is a risk of rushed regulation strangling future growth, our correspondent says.
Room for ObamaRoom for Obama
France's President Nicolas Sarkozy, chairing the Brussels meeting, says the 15 November Washington summit needs to be "a new Bretton Woods" - referring to the 1944 meeting which led to the creation of the International Monetary Fund and other global institutions. The British worry is that too much detail will tie European hands in Washington Mardell blog: Pre-summit summit Mr Sarkozy says the Washington summit needs to be "a new Bretton Woods" - referring to the 1944 meeting which led to the creation of the International Monetary Fund and other global institutions. The British worry is that too much detail will tie European hands in Washington Mardell blog: Pre-summit summit
He wants fundamental reform of the international financial system to ensure there can be no repeat of the global banking crisis - widely held to be the worst since the 1929 Wall Street crash.He wants fundamental reform of the international financial system to ensure there can be no repeat of the global banking crisis - widely held to be the worst since the 1929 Wall Street crash.
France is keen for the EU to demand a 100-day deadline for action - a timescale that could involve US President-elect Barack Obama in the proposed reforms.
UK Prime Minister Gordon Brown told reporters on Friday that "we've got to get the banks resuming lending".UK Prime Minister Gordon Brown told reporters on Friday that "we've got to get the banks resuming lending".
He stressed that "the key to solving this problem is not wholly the action we can take nationally, but what we can do globally".He stressed that "the key to solving this problem is not wholly the action we can take nationally, but what we can do globally".
European Commission president Jose Manuel Barroso said the European agenda "doesn't amount to interventionism".
"We are not for interventionism, we are for a good performance of the markets, we are for the social economy of the markets."
Liberal Democrat MEP Graham Watson said: "Progress needs to be made, for example, on a more institutionalised approach to regulation. However, the danger of too much summitry is that governments begin to disagree. The conclusions of this summit should be concise and businesslike," he said.
The European Central Bank cut its eurozone interest rates by half a percentage point to 3.25% on Thursday, in an effort to prevent a recession.The European Central Bank cut its eurozone interest rates by half a percentage point to 3.25% on Thursday, in an effort to prevent a recession.
Meanwhile, the Bank of England made a shock one-and-a-half percentage point cut in UK interest rates to 3%.Meanwhile, the Bank of England made a shock one-and-a-half percentage point cut in UK interest rates to 3%.
Liberal Democrat MEP Graham Watson said "it is time the EU puts flesh on the bones of policy needs identified at the last summit" in mid-October.
"Progress needs to be made, for example, on a more institutionalised approach to regulation. However, the danger of too much summitry is that governments begin to disagree. The conclusions of this summit should be concise and businesslike," he said.