G-8 leaders from Europe to discuss turmoil on Oct 4

European representatives to the Group of Eight will meet this weekend in Paris to discuss the financial-market turmoil, Luxembourg Finance Minister Jean-Claude Juncker's office said.

Germany, the UK, France and Italy will meet October 4 in the French capital with European Central Bank President Jean-Claude Trichet and Juncker, who heads the group of euro-area finance chiefs, Juncker spokeswoman Carole Ensch told Bloomberg News in Luxembourg today.

A pan-European approach to the banking crisis is unlikely, Trichet told Bloomberg Television in an interview late yesterday. The goal is to develop “a more systemic approach” to handling the financial crisis, according to Juncker. The European Union today proposed a regulatory overhaul that will force banks to hold more capital for asset-backed bonds.

The measures advanced today by Charlie McCreevy, the EU's financial-services commissioner, would tighten the oversight of lenders and curb practices, such as selling questionable loans to investors, that led to a global credit crunch and record bank losses. Europe's central banks so far have chosen not to follow the US Federal Reserve in slashing interest rates since the credit squeeze began 13 months ago, injecting cash into their markets instead, while keeping monetary policy focused on inflation. Authorities in Europe took action to rescue four banks this week and Ireland yesterday said it would guarantee bank deposits and debt for two years.

Juncker, who also serve's as his country's prime minister, said yesterday that the outcome of the Oct 4 meeting is “difficult” to predict. Still, the EU and the euro-area nations have “to take a leading role,” he said.