Reform Proposal

The ministers met Tuesday, Nov. 4, in Brussels to prepare the 27-nation bloc for an upcoming summit with the leaders of the world's top 20 wealthy nations to be held Nov. 15 in Washington.

"The time is coming, we can no longer trust self-regulation on financial markets," Dutch Finance Minister Walter Bos said. "I believe there is a lot of support for that, certainly also on the global level. That's something to be achieved in Washington."

France takes the lead

The EU proposals agreed to Tuesday were drawn up by France, which currently holds the rotating EU presidency, and were passed with few changes, Reuters news agency reported.

The French plan calls for emerging countries, such as Brazil and India, to take on a bigger role in the global financial system, including the International Monetary Fund (IMF). Britain's Prime Minister Gordon Brown has called on Saudi Arabia, China and other relatively wealthy countries to help fund a new IMF program to stabilize struggling economies.

The plan also recommends compulsory registration and monitoring of credit rating agencies as well as new codes of conduct deter to bank managers from taking excessive risks, according to a draft copy of the EU proposal.

Focus on long-term reform

The proposal also aims to improve accountability, responsibility and transparency of global financial markets as well as anticipate risk, Reuters reported.

"Our policies have to go beyond simply stabilizing the financial markets," Luxembourg Prime Minister Jean-Claude Juncker, head of the group of euro zone nations, said Tuesday.

While there was broad agreement on the French proposal, some differences remain. Britain and Sweden complained that the text was "too detailed" while others said it was "no detailed enough."

A further concern by some member states involves the dangers of regulating financial markets too much.

"There should be no suspicion that a European economic government is being established," German Finance Minister Peer Steinbrueck said.

But his concerns were played down by French Finance Minister Christine Lagarde.

"We should not over-regulate, but clearly we also want to make sure we don't leave loopholes or dark holes in the regulations, where either products, players or territories would be left completely without such regulation," she said.

Discussions on the French proposal will continue Friday, when EU leaders will hold a summit ahead of the G20 meeting.