> Stronger regulation of financial markets

Malaysia will back international efforts for strong regulation of financial markets to curb excessive speculation, and the scrutiny of rating agencies in the wake of the global financial crisis, Prime Minister Datuk Seri Abdullah Ahmad Badawi said today.

He said greedy speculators were manipulating capital markets and there were rating agencies making baseless reports that were irresponsible.

“What is needed is a strong regulatory framework as well as internationally benchmarked standards of corporate governance, risk management and market conduct,” he said at the end of the two-day Asia-Europe Meeting (ASEM).

 Abdullah said he supported French President Nicolas Sakorzy’s call for regulation and supervision of rating agencies and all markets.

In his speech at the Asem opening, Sarkozy had asked Asia to support a united stand by Europe at the Nov 15 summit of G20 countries in Washington to discuss the financial crisis that has caused upheavals throughout the world.

The French leader, current president of the European Union, who wants to overhaul the Bretton Woods system which dates back to the end of World War II, said: “Europe would like Asia to support that effort, so that together on Nov 15, we can tell the whole world that the causes of this unprecedented crisis will never happen again.”

Abdullah said Japanese Prime Minister Taro Aso will also forward East Asia’s views on tackling the crisis at the Washington summit called by President George W. Bush as volatility continues to wreck the financial industry and stock markets despite massive bailouts and capital injections.

Asked if he was optimistic of the Washington meeting, Abdullah said he was encouraged by Sarkozy’s resolve to come out with an agreement from Washington.

“We agree with a free market but the market forces are subject to speculation, so governments have the right to intervene though not heavily,” said the Prime Minister.

Abdullah said reports by rating agencies could influence investors and  businessmen.

On the possibility that the US may resist change to protect the supremacy of the greenback as the world’s leading trading currency, he said the US too shared the same concerns about the market speculation activity.

On Friday, ASEM for the first time issued a statement to address the current financial turmoil which it said was posing severe challenges to the financial stability and economic development of Asian and European countries.

The leaders said the International Monetary Fund must play a critical role upon request by countries which were badly affected by the crisis.

Abdullah said the strong ASEM stand marked a success for the two continents and also for the Asean Plus Three process which encompasses the 10-member Asean grouping and their three East Asian dialogue partners, China, Japan and South Korea.

“Asia and Europe are now standing together and this is a big strength forward. Europe is a big global economy while East Asia is a strong growth region,” Abdullah said.

ASEM is made up of 27 EU member countries, European Commission, 10 Asean member countries, Asean Secretariat, China, Japan, South Korea, India, Pakistan and Mongolia -Bernama.