Not clear if worst of subprime is over: regulator

Houses for sale in various states of completion are seen in Golden, Colorado, June 25, 2007.

BRUSSELS (Reuters) - It is still difficult to say whether the worst of the U.S. subprime mortgage-related market crisis is over, a top market regulator said on Tuesday.

"It's hard to say if the worst is over ... French banks have probably been a little less exposed than others," Michel Prada, president of French securities market regulator AMF, told Reuters.

In August, when the subprime crisis began rattling global securities markets, French bank BNP Paribas (BNPP.PA) barred investors from redeeming cash in $2.2 billion worth of funds, telling markets it was unable to calculate the value of three funds due to the subprime turmoil.

Prada also chairs the technical committee of the International Organization of Securities Commissions (IOSCO), which groups over 100 national market watchdogs.

IOSCO has just launched a taskforce as part of a global regulatory effort to review market rules to see whether changes are needed and to learn lessons from the U.S. subprime crisis.

"We are not contemplating necessarily new hard rules," Prada said.

"There are divided views. Some are more in favor of a light touch, others more in favor of more regulation. It's too early to say," Prada said.

Prada said the aim of the taskforce was to improve information flows.

"What has been lacking in the recent events is information, increasing information on all the issues related with risk transfer," Prada said.

He said the subprime problem itself had been identified, but the question now was whether it would evolve into "some new developments" or whether there would be a soft landing and resumption of the credit markets.

The completion of repricing risks in the market coupled with growth in self-supporting economies like China could lead to a more positive outcome, Prada said.

(Reporting by Huw Jones, editing by Dale Hudson)