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Call for new EU body to check stability

EUROPEAN Union finance ministers on Saturday called for a new authority to monitor financial stability as a first step toward overhauling the region's regulatory system.

They also broadly backed moves to share banking oversight - but officials warned of thorny talks ahead because it is unclear how far governments will let go power over how banks are governed.

"The devil is in the details," Czech Finance Minister Miroslav Kalousek said.

Finance ministers from the EU's 27 nations asked the bloc's executive, the European Commission, to outline recommendations for how Europe should deal with threats to financial stability.

The earlier focus on risks to individual banks had blinded national regulators to the causes of the credit crisis, such as the securitized debt that unraveled as investments based on United States subprime housing loans plunged in value.

The commission promised it would lay out a draft plan by mid-May for a European systemic risk council that would likely be led by the European Central Bank. EU leaders would decide on an outline in June, and rules could be tabled by the end of the year.

The ECB is the central bank for the 16 nations that use the euro, and Britain and Denmark - which don't use the euro - expressed fears of the euro zone dictating to other economies.

But the ECB said any role given to it would see all 27 EU nations involved in making decisions via the bank's governing council.


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