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. Last Updated: 07/27/2016

EU Ministers Press for Transparency

PORTO, Portugal -- EU finance chiefs lobbied for greater transparency of complex financial instruments but stopped short of advocating tighter regulation across Europe on Saturday as a global credit shortage and financial market turbulence showed no signs of abating.

Finance ministers and central bankers from the 27-member European Union cautioned against knee-jerk reactions as they met here for the first time since money markets seized up in early August amid fears of widening losses in the U.S. subprime mortgage market.

"It would be a mistake to rush out now with new ideas for regulation," said Charlie McCreevy, the European Commission's financial markets overseer.

European Central Bank President Jean-Claude Trichet said it was "too early to draw definitive conclusions."

The officials ordered a review of the transparency of complex financial instruments and the efficiency of risk management by banks and other institutions.

Fingers have been pointed at unregulated industries, such as private equity and hedge funds, for exacerbating the crisis.

Portuguese Finance Minister Fernando Teixeira dos Santos, who hosted the gathering, indicated that the review could lead to greater regulation across Europe, but he made no commitments.

Ministers also discussed progress on already planned measures to improve cross-border stability in Europe and draft standards for clearing and settlement systems for securities markets, which are designed to cut risk in trading.

The EU's cautionary stance is a rejection of a push for stronger regulation led by German Chancellor Angela Merkel and French President Nicolas Sarkozy.

Merkel and Sarkozy blame the banks that made risky bets on U.S. subprime mortgages and the ratings agencies that graded these investments for the current financial market turmoil.

Bank of Italy Governor Mario Draghi, who heads the Financial Stability Forum, a body of international regulators that has been asked by the Group of Seven to investigate the recent financial market turbulence, also indicated that he favored tighter regulation, saying self-regulation by markets had not worked.