Brdo, 07/04/2008 (Agence Europe) - On Friday 4 April, EU finance ministers discussed developments in the roadmap of actions agreed in October 2007 (see EUROPE 9519). We are on the right road to achieving our objectives by the end of 2008, said Slovenian finance minister Andrej Bajuk, outlining areas of progress listed for each of the four areas of the roadmap (transparency, valuation, prudential rules and risk management and improved market functioning) in a recent document from the Economic and Financial Committee (see EUROPE 9636). The impact of the financial turbulence would 'keep us busy throughout 2008, but I advise against getting hysterical about it,' said Peer Steinbruck, Germany's finance minister, when he arrived in Brdo, Slovenia. This impression was confirmed by his Italian counterpart Tommaso Padoa-Schioppa after the ECOFIN meeting on 5 April. 'There's the clear feeling that the worst is not over, neither as far as the financial crisis is concerned, not on the successive cuts to expected economic growth,' he explained. The negative impacts of the turbulence that broke out in August are beginning to make themselves felt in the real economy, and the tensions on the inter-bank lending market have increased since the end of February 2008, explains a joint statement from ministers and the governors of central banks. Adopted after the meeting in Brdo, the document explains that central banks have reacted promptly by supplying the necessary liquidity.
On transparency, they called on financial institutions to make full and immediate disclosure of on and off-balance sheet risk exposures and losses. They noted that the European banking and securitisation industry is working on a number of proposals to enhance the transparency of structured credit markets which should be finalised by June 2008. They added: 'Should these measures not be sufficient, they could be completed by regulatory actions'. The ECOFIN Council will be returning before the summer to the role of ratings agencies when it comes to assessing structured products. The Commission will be making an assessment of this in July 2008. The document notes that if market solutions prove insufficient, the ministers are prepared to consider regulation instead. (A.B.)