MercoPress. South Atlantic News Agency

Sarkozy calls for more regulation in financial markets

French President Nicolas Sarkozy wants Europe to play a stronger role in international financial markets regulation to strengthen governance rules and boost confidence, his office said in a statement on Tuesday.

"The president supported the idea that political authorities should look into questions of regulation and financial stability at the highest level" said the statement after Sarkozy received a report on financial market stability. It said Europe should build up contacts with the United States, Japan and emerging economies "to assure coordination in approaches to regulation and supervision and to progress towards a convergence of norms and practices at the global level". Sarkozy asked Economy Minister Christine Lagarde to present the report, by the former head of the International Federation of Accountants Rene Ricol, to her European Union colleagues at a meeting of EU finance ministers in Nice next week. The comments echo frequent criticisms Sarkozy has made of the financial industry following the credit crisis that emerged in U.S. mortgage markets and later spread throughout the world banking and finance system. The statement said Sarkozy, whose country holds the rotating European Union presidency, wants to review the "the principles of remuneration in the finance industry which contribute to the excesses that have been seen." It also called for reinforced internal governance rules at banks and financial institutions and tighter surveillance of ratings agencies, which have been accused of attributing over-generous ratings to repackaged mortgage securities. As well as calling on the banking industry to exercise more discipline and rigor in developing and selling new financial products, the release said markets should not be allowed to grow up unsupervised and liquidity flows should be analyzed better. "On this point, he confirmed his wish of seeing Europe taking part in reflections on price volatility in the price of commodities since the start of the year," the statement said