23 Feb 2009

European leaders want financial clampdown

6:20 am on 23 February 2009

European leaders in Berlin have agreed on the need to regulate all financial markets including hedge funds.

Leaders of Europe's major economies said a global solution was needed to the current financial crisis.

German Chancellor Angela Merkel said they face an "extraordinary international crisis".

However, British Prime Minister Gordon Brown warned against reverting to protectionism in such a difficult economic climate.

The BBC reports the Berlin gathering is a precursor to the next meeting of the G20 group of developed and developing countries in London on 2 April, which aims to rewrite the rules of the global financial system.

The meeting agreed there was a need for international institutions, including the International Monetary Fund, to play a greater role not just to help countries in financial trouble but to prevent countries from getting into such difficulties.

Mr Brown said that the IMF needed access to at least $US500 billion.

The meeting was held amid ongoing volatility in world financial markets and uncertainty over the future of some of the world's key banks.