The European Union's finance ministers piled pressure on banks and insurance companies to provide greater transparency in the wake of the global financial turmoil.
The EU wants to beef up financial supervision to help prevent bank collapses
At an informal meeting in the French seaside city of Nice, ministers said on Saturday, Sept. 13, that "measures designed to restore confidence through transparency and the responsibility of the actors will be put in place without delay."
The EU's internal market commissioner, Charlie McCreevy, is due to unveil a set of proposals aimed at improving the transparency of financial market operators in October.
Though details are as yet unclear, the proposals are expected to include a set of requirements for credit rating agencies wishing to operate in the EU.
In Nice, German Finance Minister Peer Steinbruck said his government backed plans by France, the current holder of the EU presidency, to improve cooperation between national agencies which supervise banks and insurance companies.
His French colleague, Christine Lagarde, said 80 percent of banks had so far complied with the EU's disclosure requirements.
While noting that transparency was "improving", Lagarde said "we need to reach 100 percent."
Lehman Brothers' shares were in free fall as investors lost confidence amid mounting losses
The Nice meeting was also attended by the governor of the Italian central bank, Mario Draghi, who also chairs the Financial Stability Forum, which groups central bankers and regulators from the world's leading economies.
Draghi was reported on Friday as saying that the world's banks may need at least $350 billion (246 billion euros) of fresh capital to counter the losses resulting from the global credit crunch sparked by the US subprime mortgage crisis. The figure was higher than previously thought.
US giants Lehman Brothers Holdings Inc. have become the latest victims of the credit squeeze.
Lehman's shares fell by 40 percent on Thursday and by another 13.5 percent on Friday after announcing its biggest ever loss on Wednesday.
Still no breakthrough on VAT
German Finance Minister Peter Steinbruck opposes the idea of lowering VAT rates
Meanwhile, the EU finance ministers failed to agree on a proposal to reduce VAT rates in labour-intensive sectors such as catering or cleaning, saying its impact on jobs and on public accounts required further study.
Germany's finance minister, Peer Steinbruck, told reporters that about eight of the EU's 27 member states had sided with the German decision to oppose the European Commission's plans.
Steinbruck estimated Germany's tax revenue losses as a result of the proposal at 12.5 billion euros. He said a small country like Denmark would stand to lose as much as 1 billion euros.
But European Commissioner Laszlo Kovacs, the Brussels official in charge of taxation who tabled the latest proposal in July, said he was still confident that the unanimity needed to approve tax-related measures such as this could still be reached.
"It is evident that there are two schools of thought," Kovacs said, "and it is true that there has been an endless debate that has resulted in a deadlock."
But Saturday's debate has helped "break this deadlock", and there are enough past examples within the EU to suggest that a unanimous agreement is possible, Kovacs said.