EU finance ministers yesterday agreed to appoint a committee of "wise men", chaired by the former president of the European Monetary Institute, Mr Alexandre Lamfalussy, to examine regulatory obstacles to the development of integrated European financial markets. It is due to take soundings and produce a preliminary report by November.

The meeting was the first under the new French presidency, which has for some time been promoting the idea of upgrading the status and clout of the euro-11 group of finance ministers, now known as the eurogroup.

But French plans for the group were most notable for their moderation, and a cautious French Minister for Finance, Mr Laurent Fabius, contented himself yesterday with an announcement that the group would meet the day before monthly Ecofin meetings and would start to publish advance indicators on the future performance of the euro zone.

Commission sources said, however, that the gradual, quiet expansion of the agenda of the euro-group was more important than any institutional changes.

On Sunday, in addition to the usual diet of a debate on the monetary performance of the euro and a general discussion of the euro zone, ministers also discussed practical aspects of the launch of coins and notes in 2002, recommendations on use of cash windfalls such as those arising from mobile licence auctions, and a report from the IMF on the euro zone.

There was a consensus that windfalls should be used either to reduce national debt or to copperfasten pension funds. Mr Fabius also told journalists that remarks attributed to him, speaking to the economic committee of the European Parliament last Tuesday, to the effect that euro zone finance ministers should set an inflation target instead of the ECB, had been misconstrued.

Minor changes to the wise men's committee mandate, to stress the market-liberating rather than the regulatory dimension of its task, allowed the British and the French presidency to claim it was their creature.

An absent British Chancellor, Mr Gordon Brown, even submitted a paper urging an acceleration in the EU Financial Services Action Plan for the single market, to complete it by 2004 instead of 2005 and to complete the capital market as early as 2003.

Mr Fabius said he had not had time to read the submission which had arrived late on Sunday night.

The Internal Market Commissioner, Mr Frits Bolkestein, said that negotiations on the mandate had not in any way constrained the wise men and he insisted that "the Commission has no blueprints but does consider it urgent to look at all the options".

The Minister for Finance, Mr McCreevy, said that the decision was being taken in the context of the possible amalgamation of European stock exchanges but "for Irish start-up companies, particularly in the high-tech area, most now go to the Nasdaq for capital in recent years . . . . So we have access to plenty of capital but are interested to see what comes out of it. It's not a big issue for us".

The other six nominees are all bankers or market specialists: the former chairman of the EU's monetary committee, Sir Nigel Wicks (UK), the former president of Royal Dutch Shell, Mr Cornelis Herkstroter (Netherlands), the former Spanish central bank governor, Mr Luis Angel Rojo, Mr Luigi Spavent (Italy), Mr Norbert Walter (Germany, and Mr Bengt Ryden (Sweden).

But ministers failed to make progress on a money laundering directive due to opposition by member-states to provisions requiring lawyers and accountants to notify the authorities of suspicious cash transactions. Ministers also asked the Commission to bring forward proposals for a directive to introduce common company accounting standards by 2005.

The report on the euro zone from the IMF said that the European Central Bank would have to increase its key interest rates slightly if the euro remains weak, as financial markets are signalling.

But the IMF also said that the euro zone was in a period of long and strong expansion.

The study of economic policies in the 11-state euro zone said that the rise of the price of oil and persistent weakness of the euro were putting upward pressure on costs which, against a background of strong economic activity, would justify a tightening of monetary policy.

But the IMF said that these pressures might be reversed, opening the way to easier monetary policy.