EU leaders back sweeping financial regulations

European leaders meeting in Berlin on Sunday backed oversight of the world's financial markets and products, including hedge funds, and urged that sanctions be drawn up to punish tax havens.

A copy of the "chair's summary" from a summit hosted by Chancellor Angela Merkel describes the situation in financial markets as "fraught" and says structural reforms and a focus on public spending are needed to emerge stronger from the global crisis.

"We have today underscored once again our conviction that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile," the statement says.

"This is especially true for those private pools of capital, including hedge funds, that may present a systemic risk."

The statement also urges definitive actions against tax havens and uncooperative jurisdictions.

"According to objective criteria to be based on ongoing work in relevant international institutions, a list of uncooperative jurisdictions and a toolbox of sanctions must be devised as soon as possible," the statement says.

Merkel invited the leaders of Britain, France, Italy, Spain, the Netherlands, Czech Republic and Luxembourg, as well as the European Commission president, finance ministers and European central bankers to prepare a common stance ahead of a full G20 meeting in London on April 2.

-Associated Press