European and US officials seek joint financial reform

14 May 2010

Officials from both the US and the eurozone have announced their joint commitment to an overhaul of the international banking system.

Michel Barnier, EU internal markets commissioner and Tim Geithner, US treasury secretary, made the joint statement while the former was on a visit to the US.

Both politicians agreed that as the largest financial systems, their respective economies need to set an example on reform to create new global standards.

In a statement, the pair said they “agreed on the importance of reducing systemic risk and the too-big-to-fail problem by raising prudential standards through implementing the G-20 Leaders' commitments including: stronger capital and liquidity requirements; a leverage ratio; a global framework for comprehensive regulation of OTC (over-the-counter) derivatives markets; and stronger crisis management and resolution tools.”

The two finance experts also stated that they would be working towards a “common implementation” date for the introduction of Basel trading rules.

Meanwhile, Mr Barnier recently called for stricter legislation on credit agencies and their system of rating investment products.

By Jim Ottewill

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