Finance ministers from across the EU yesterday backed far-reaching proposals for a global regulatory crackdown and an end to light-touch supervision of banks and financial groups, which have been blamed for world economic turmoil.

Meeting in Brussels, the ministers agreed an 11-point plan for overhauling financial regulation as well as the International Monetary Fund (IMF) and other important international institutions.

Europe will now press this strategy for global economic and financial reform on other key economic players on November 15 at a Washington summit of the G20 - the Group of Seven leading Western economies alongside the main emerging market powers.

“It is a checklist ... that clearly we are trying to push at the global level and on which there was massive support within the group this morning,” Christine Lagarde, the French Finance Minister, said after yesterday's talks.

The proposals set out by the EU would seek to curb “short-termism” in markets, improve accountability and transparency, and better anticipate financial threats. The plan would also give emerging market nations such as China and India a bigger say in the operations of the IMF and other global institutions, and calls for increased oversight of credit ratings agencies and accounting rule-setters. However, it stops short of direct moves to regulate hedge funds and private equity groups.

Other proposals call for greater cross-border supervision of big banks, a code of conduct to curb financial incentives that encourage excessive risk-taking and an expansion of the role of the Basle-based Financial Stability Forum, which is composed of international regulators. It remains unclear to what extent the United States will be ready to accept the harder-line policy on regulation advocated by Europe.

Ms Lagarde said: “We have in mind ... the fact that we should not overregulate, but clearly we also want to make sure that we do not leave loopholes or dark holes in the regulations where products, players or territory would be left completely without such regulation,”

Gordon Brown, returning from talks in Dubai with Gulf states, said that he expected a number of countries with very large foreign reserves to agree to his call for them to inject billions into the IMF to boost its fighting fund to shore up economies stricken by the credit crisis. There are fears that continued fallout from the crisis will deplete the IMF's $250 billion (£156.6 billion) in readily available resources. The Prime Minister said: “People are willing to work with us to make the changes that are necessary in the international financial order.”

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