Leaders from Britain, France and Germany have called for rules for financial institutions that would ensure improved governance and greater transparency, the British prime minister's office said Thursday.
British Prime Minister Gordon Brown, German Chancellor Angela Merkel and French President Nicolas Sarkozy made the call in a letter addressed to Swedish Prime Minister Frederik Reinfeldt, whose country currently holds the EU presidency.
The officials said it is key that the G20 leaders seize the opportunity offered by the upcoming Pittsburgh summit to reaffirm their determination to improve the world's financial markets in order to avoid a repetition of the economic crisis.
A primary issue at the Pittsburgh summit will be to further design an international regulatory framework for the financial sector that puts it at the service of the real economy. Compensation in the financial sector is another issue that will be addressed at the summit.
"We should explore ways to limit total variable remuneration in a bank either to a certain proportion of total compensation or the bank's revenues and/or profits," the European leaders said in the letter.
Moreover, speculative activities that constitute a risk to financial stability should also be discouraged by increasing capital requirements on those activities, the leaders said.