PARIS (AP) -- France on Tuesday called for stricter European rules on commodity derivatives trading, part of its push for tighter global financial regulation as it prepares to chair the Group of 20 summits of rich and developing nations later this year.
In letters to the European Commissioners in charge of agriculture, energy and financial regulation, dated August 27 but released Tuesday, three French ministers said that EU rules are "insufficient."
Signed jointly by Finance Minister Christine Lagarde, Environment Minister Jean-Louis Borloo and Agriculture Minister Bruno Le Maire, the letters say that "it is essential that Europe commit fully to regulation of these markets and that it do so now," possibly with legislation.
When it takes leadership of the G-20 meetings in November, France will make effective regulation of all financial markets a priority, the letter said.
France said that the role played by traders in fueling the ups and downs of the market for oil, agricultural products and other commodities is not yet fully understood.
It would "unfairly penalize" farmers and consumers of basic foodstuffs if the rise in prices was fueled not by market reality but by traders seeking financial gain, France said.
Many traders on derivatives markets are not subject to regulation and there is no sanction mechanism for abuses such as cross manipulation between physical and derivatives markets, France said.
Copyright 2010 The AP.