Europe Economy

Sarkozy, Brown Call For Market Transparency


French President Nicolas Sarkozy and British Prime Minister Gordon Brown called on Thursday for banks to declare the full extent of the damage to their operations caused by the credit crunch.

Leaders around the world are trying to stem the fallout from financial turmoil sparked by bad home-loan debts in the United States which has raised the risk of a global economic downturn.

"We agreed the need for greater transparency in financial markets to ensure that banks make full and prompt disclosure of the scale of write-offs, including finding ways to give greater certainty on the valuations of complex financial assets," Brown and Sarkozy said in a joint statement.

Banks have written down more than $125 billion of assets due to the credit squeeze sparked by so-called sub-prime mortgages in the United States. Some estimates put the scale of bad debts on banks' books as high as $600 billion.

The two leaders also agreed to act to "secure global prosperity in a more turbulent global market place by reforming the IMF (International Monetary Fund) so that, in concert with the financial stability forum, it provides a credible and authoritative early warning system for the world economy and international financial system."

Brown said the two also agreed action on issues including opening up trade between poor and rich countries, clamping down on illegal immigration and tackling climate change.

"We also agreed that we need Britain and France at the heart of Europe, a global Europe, that is reforming, open, flexible, outward-looking and retains a strong social dimension," Brown said.

Sarkozy pledged in a speech to the British parliament on Wednesday to send more troops to fight the Taliban in Afghanistan and called for a "new Franco-British brotherhood."

Britain and the United States have been urging NATO allies to increase troop contributions to the alliance's force in Afghanistan, where the Taliban appear to be growing in strength.

Brown and Sarkozy have struck up a good relationship since both came to power last year but the popularity of both leaders has dropped recently.

Sarkozy's ratings have sunk since he married Carla Bruni, a supermodel-turned-singer, last month.