(Agencies)
Updated: 2008-03-24 10:51

LONDON - British Prime Minister Gordon Brown and French President Nicolas Sarkozy will urge banks this week to make "full and immediate disclosure" of write-offs due to the global credit crisis, British officials said on Monday.

The two leaders are increasingly concerned that confidence in financial markets is being hit by uncertainty over the scale of bad debts on banks' books, which some estimates put as high as $600 billion, Brown's office said.

Sarkozy is due to hold talks with Brown on Thursday during his two-day visit to Britain as guest of Queen Elizabeth.

The two men will "call for greater transparency in financial markets and, as a first step, full and immediate disclosure of the scale of write-offs by banks," Brown's office said in a statement.

The bank crisis, especially the collapse of US bank Bear Stearns, had shown "the scale of the problem and the effect on market stability of difficult-to-value assets and of undisclosed losses becoming known in a piecemeal fashion," it said.

Mortgage-backed securities have plunged in value amid a credit squeeze sparked by low quality mortgages in the United States, leading to a vicious circle of forced sales, falling prices and weakening balance sheets for banks.

Banks have written down over $125 billion of assets since November, hammering their shares.

So far, action by central banks and governments has failed to halt the market turmoil.

Sarkozy's visit is seen by British media as part of his drive for a close partnership with Brown.

Call for more talks with US

The two leaders will call for more talks with the United States and other countries on "measures to promote financial stability", in forums such as the Group of Seven industrialised countries, the International Monetary Fund and World Bank, Brown's office said.

   1 2   

   1 2