BBC NEWS | 2009/12/10 08:03:38 GMT
British Prime Minister Gordon Brown and French President Nicolas Sarkozy have issued a joint call for urgent global reform of financial markets. The joint letter comes ahead of talks on the sidelines of an EU conference, where they will try to brush off a row over an EU appointment. Mr. Sarkozy appeared to boast that a Frenchman’s appointment to oversee European banking was a British defeat. The EU summit will also address climate change and financing. Mr. Brown and Mr. Sarkozy had cancelled a meeting scheduled to be held last week, amid speculation of a row over EU posts. Mr. Sarkozy had told Le Monde newspaper the British were “the big losers” in the share-out of EU jobs after former French agriculture minister Michel Barnier was given the role of supervising Europe’s internal market for financial services, most of which is in the City of London.
But European diplomats tried to brush rumours of a disagreement between the two leaders to one side. “I think it’ll be fine. In two years, you’ll be wondering what the fuss was about,” one unnamed source told Reuters. Mr. Brown’s spokesman too said the meeting had a broader agenda than fixing bruised ties. “It’s not specifically focused on any one issue. There are lots of things going on,” he said. In a show of unity ahead of the talk, the leaders issued a joint call for the urgent global reform of financial markets. Writing in the Wall Street Journal, they say a one-off tax on bank bonuses should be “considered a priority.” The two leaders say it is “simply not acceptable” for taxpayers to cover the cost of bank failures but not benefit from their successes. The BBC’s Jonny Dymond, in the Belgian capital, says the joint article at times reads like a call to arms. In it, Mr. Sarkozy and Mr. Brown say the financial crisis has made them “recognise that we are now in an economy which is no longer national but global, so financial standards must also be global”.
“We must ensure that, through proper regulation, the financial sector operates on a level playing field globally.” They say there is an “urgent need for a new compact between global banks and the society they serve”. “A compact that ensures the benefits of good economic times flow not just to bankers but to the people they serve; that makes sure that the financial sector fosters economic growth.” Various proposals to reform the sector “deserve examination,” they said, but a one-off tax on high bonuses paid to bankers “should be considered a priority.
People rightly want a post-crisis banking system which puts their needs first. To achieve that, nothing less than a global change is required,” the leaders wrote. The meeting comes as the UK finance minister Alistair Darling announced a one-off supertax on banker bonuses in a pre-Budget report on Wednesday. The new tax – which would be paid by banks and not individuals – is designed to discourage institutions from paying large bonuses to employees in the wake of the major taxpayer support they have received in the financial crisis.