European Union finance ministers agreed on Tuesday to review a slew of financial rules in the light of the summer's credit squeeze that tipped securities markets into turmoil.
"We agreed on a work programme, a so-called road map, laying down what we will do through 2008," Fernando Teixeira dos Santos, finance minister of EU president Portugal, told a news conference.
"During that period clearly the necessary contacts will be established with relevant bodies and institutions in the financial sector," Teixeira dos Santos said.
Defaults by people with poor credit histories that took out mortgages in the United States led to a chain of events that caused the market in many complex products to freeze and banks to distrust each other.
The European Central Bank, the Bank of England and the U.S. Federal Reserve all had to pump in cash to keep the financial wheels turning.
The timetable on regulatory review, as reported by Reuters on Friday, details which rules will be reviewed by central banks, finance ministers and market watchdogs from the bloc's 27 member states.
EU Internal Market Commissioner, Charlie McCreevy said the workload would be heavy but much of it would be coordinated by the EU executive and member state ministers.
Italy's Finance Minister, Tommaso Padoa-Schioppa, said it was important that banks contributed to the review as well and even pushed for an independent reviewer so that states hear different points of view.
Roadmap to Review
The roadmap seeks to adopt a coherent approach to planned and existing strands of regulatory reviews and culminate in mid-2008. It aims to ensure a global aspect by including the G7.
The full fallout of the summer's financial problems has been hard to assess because the markets for some of the complex products involved have frozen, making it difficult for banks and others to evaluate them, a paper discussed by ministers said.
There are questions to be answered on the information provided on special purpose vehicles, conduits and structured investment vehicles -- structures used by banks to offload riskier investments from their books, a paper added.
French Economy Minister Christine Lagarde put forward six proposals for particular attention such as greater scrutiny of some banking operations and tackling perceived conflicts of interest in credit rating agencies.
"Firstly, one of the particular issues in this crisis is tied to the chain of securitisation and the need to improve its transparency and clarify responsibilities," Lagarde said in comments made available to the press.
Accounting standards for marking to market -- a reference to quarterly review of the value of financial products on bank's books -- should be looked at again in light of the credit crisis, she added.
Many of Lagarde's proposals, such as on hedge funds, credit agencies and general transparency were already being looked at.
EU financial watchdogs are due to report in 2008 on whether tighter regulation of credit rating agencies is needed.
The hedge fund industry is looking at codes of conduct to improve transparency after a German led push for a mandatory shake up of the sector met resistance from Britain and the United States.