EU Leaders Back Sweeping Financial Regulations

European leaders backed sweeping new regulations for financial markets and hedge funds at a summit Sunday in Berlin as politicians and nations scrambled to tame the global economic crisis. All financial markets, products and participants including hedge funds and other private pools of capital which may pose a systematic risk must be subjected to appropriate oversight or regulation. Top officials from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and Czech Republic agreed on seven key points. A clear message and concrete action are necessary to engender new confidence in the markets and to put the world back on a path toward more growth and employment. European leaders backed Merkel's call for a "charter of sustainable economic activity" to reduce economic imbalances and stabilize financial markets. The charter would subject all financial market activities around the globe to regulation, including credit rating agencies. Merkel said the charter would be "based on market forces but prevent excess and ultimately lead to the establishment of a global governance structure." Other key points included adopting sanctions to safeguard against tax havens and urging banks to keep larger reserves of capital. Officials said a final copy of the summit agreement would not be circulated Sunday, in order to allow European Union members not present to view it first.