President of the United States, George W Bush, and Prime Minister Gordon Brown will discuss the possible establishment at summits in Bucharest and Washington during April, with input from US Treasury Secretary, Hank Paulson, and UK Chancellor, Alistair Darling.
The plan is to form a body of senior Treasury and regulatory figures from London and Washington to supervise international banks and financial institutions.
Officials from Whitehall have said that the group will seek to establish a common approach on how to respond to the current worldwide financial crisis and that it will be confirmed before next month’s meetings of the G7, IMF and World Bank.
According to the Treasury, the body will examine the role of credit rating agencies in evaluating risk amid concerns that they did not fully appreciate the exposure of mortgage-based products to a fall in the housing market.
There will also be an examination of what banks and other lenders need to do in order to improve their transparency in the valuation of complex financial products.
The ultimate aim is to improve day-to-day co-operation between the regulators in the UK and US. Brown said: “We need to have higher standards for disclosure and transparency.”
Bob Sturges, director of communications at Money Partners, said he believed that the solution to the problems currently facing the market could not be solved by regulation, only by the market itself.
He commented: “It is too early to say whether it is positive but I believe that this is inevitable as there will be calls for greater regulation. But I believe that the solution to this problem is beyond regulation alone as a crisis such as this can only be solved by the market itself.”
