Merkel slams “Anglo-Saxon” financial market regulation

German Chancellor Angela Merkel wants Continental Europe to have a greater role in regulating global financial markets because Anglo-Saxon efforts have failed, the Financial Times reported on Wednesday.

In an interview with the business daily published on the day she was meeting with US President George Bush north of Berlin, Merkel said the “Anglo-Saxon” organization of the world’s markets undervalued the importance of the euro zone.

“Europe has developed a certain independence thanks to the euro,” she told the FT. “But . . . in terms of the rules, the transparency guidelines and the entire standardization of financial markets, we still have a strongly Anglo-Saxon-dominated system.”

She specifically called for a European credit ratings agency to balance out the current dominance of American firms like Moody’s and Standard & Poor’s.

“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 said.

Germany is pushing for greater influence for the euro zone within the Group of Eight (G8) leading industrial nations amid the subprime credit crisis sparked by the collapsing US housing market. Merkel told the paper she would support new capital requirements for banks in order to reduce the financial markets’ exposure to risky investments.

“We need to think about the relationship between capital and risk,” Merkel said. “But these rules can only be discussed at an international level.”