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Brown and Sarkozy to call for greater banking transparency

24/03/2008

The heads of state of Britain and France will call for greater transparency in the financial sector during their meeting on Thursday.

The French president's visit to England comes during global turmoil in the financial markets with the US federal reserve making a 0.75 per cent interest rate cut to provide a spur to the global economy.

Prices of oil, gold and other commodities have reached record highs in the past few weeks and losses caused by subprime mortgages have resulted in the collapse of Northern Rock in England and the sale of global investment bank Bear Stearns.

According to British officials, Gordon Brown and French president Nicolas Sarkozy will ask banks to ensure "greater transparency in financial markets" and to engage in the "full and immediate disclosure of the scale of write-offs".

In addition, Mr Brown and Mr Sarkozy will also call for a review into the operation of credit rating agencies - firms which provide information about the reliability of bonds - amid concerns that they are paid by the same investment banks who create the internationally tradable loans.

The two leaders will also discuss proposals to give the International Monetary Fund a greater role in ensuring economic stability by providing information on events that could lead to global financial crises.

Both countries, who are permanent members of the United Nations security council, are also keen on improving the 15-member body's representation of the world by calling for a permanent seat for Africa.