New body to be set up to supervise banks | india | Hindustan Times
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New body to be set up to supervise banks

Britain, France, Germany and Italy have agreed to set up within the EU a body to supervise banks as part of their joint efforts to stem the spread of the financial turmoil.

india Updated: Oct 05, 2008 18:57 IST

Britain, France, Germany and Italy have agreed to set up within the EU a body to supervise banks as part of their joint efforts to stem the spread of the financial turmoil, triggered by the US sub-prime mortgage crisis, in Europe.

In a statement released after an emergency summit in Paris to deal with the raging financial crisis, British Prime Minister Gordon Brown, French President Nicolas Sarkozy, German Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi said mechanisms should be established within the European Union to oversee cross-border European financial institutions and enhance international cooperation.

The four nations also agreed that should public support be necessary for ailing financial institutions, it should take place in "a framework which recognises adequate protection of taxpayers' money, the responsibility of managers, and shareholders to bear their share of the burden."

They welcomed the decision of the European Investment Bank to mobilise 30 billion euros of support for small and medium size European enterprises.

The talks, hurriedly held by Sarkozy, came amid signs that the financial crisis that devastated Wall Street is spilling into Europe.

The meeting also came a day after the US Congress approved a whopping USD 700 billion government bailout of the battered financial industry.