A group of European heads of government and finance ministers held a summit in Berlin on February 22 ahead of the Group of 20 summit scheduled to take place in London on April 2. Representatives of the European Commission and eight leading European financial centers including Germany, France and the UK agreed on seven key points. They issued a joint statement in which they endorsed a plan to create a comprehensive international regulatory framework. Although the details remain to be worked out, the statement endorsed a plan to create a regulatory framework covering “all financial markets, products and participants—including hedge funds and other private pools of capital which may pose a systemic risk.”
The joint statement continued: “Private investment companies, including hedge funds, should also be subjected to international control. If left uncontrolled they can always become a threat to the stability of the global financial system.” The European leaders added that rating agencies should also be “registered and monitored” in light of the influence they exercised and recommended the imposition of sanctions on tax havens and other countries allowing non-transparent and improper business transactions.