France, Germany renew call for tougher regulation

France and Germany renewed their calls on Monday for tougher regulation of the global financial sector, ahead of the G20 meeting in Canada later this week.

"Since our first meeting in Washington in 2008, we have madesolid progress in implementing the financial regulatory reformagenda" French President Nicolas Sarkozy and German Chancellor Angela Merkel said in a joint letter to Canada's Prime Minister Stephen Harper. "However, our work is not yet finished. Recent financial turbulences have shown that more needs to be done to ensure financial stability" they added in the letter.

Sarkozy and Merkel called for an international agreement to introduce a levy or tax on financial institutions and for an international accord on a financial transaction tax.

They also called for tougher regulation of the over-the-counter (OTC) derivatives market and said countries also had to tackle the credit default swap (CDS) market.