German Chancellor Angela Merkel said in an interview published today that Europe should strive for more influence over the rules governing financial markets given the might of the euro currency system.
Speaking to the
Financial Times, Ms Merkel urged the creation of a European ratings agency in the medium-term to balance what she called an "Anglo-Saxon dominated" financial market system.
"I think that in the medium term Europe will need a working ratings agency because the robust currency system of the euro has not yet secured sufficient influence over the rules governing financial markets," she was quoted as saying.
Ms Merkel also criticised bankers for failing to understand fully the products they buy and sell. German lenders such as IKB have been hit hard by their exposure to the US subprime mortgage market, and Berlin has criticised bank managers for failing to comprehend the risks linked to their investments.
"Compared to industry, where people have a deep understanding of the products they deal with, financial markets are a lot more opaque," Ms Merkel said.
"That has to change so that a country like Germany, which still produces a lot of industrial goods, does not have to carry the economic risks."
Ms Merkel said she would welcome new capital adequacy ratios for banks, linking the amount they must put aside to the level of risk in their asset portfolios.
"We need to think about the relationship between capital and risk," Ms Merkel said. "But these rules can only be discussed at an international level."
Merkel also repeated a warning she has issued in the past against any steps which would call the European Central Bank's independence into question.
"If we decide to subject the actions of the ECB to political contingencies, there will always be one or several countries with good grounds to influence the ECB. I say beware: we need crystal-clear principles or we will shake confidence in the euro," she said.