EU to take 5 key messages to Washington: draft

BRUSSELS (Reuters) - Europe is likely to take five key messages to the Washington meeting on the overhaul of global financial institutions, boiling down a more extensive list of actions agreed by finance ministers, a draft paper showed.

The paper, prepared by the French presidency of the European Union for a meeting of EU leaders on Friday, also said the EU would like the Washington summit to produce concrete proposals on priorities agreed within 100 days from November 15.

"The (Washington) summit should ... formulate a precise work programme to allow the presentation within 100 days of concrete and operational proposals on those subjects identified as priorities," said the discussion paper drawn up by EU President France, a copy of which was obtained by Reuters.

The five priorities identified by the EU stick closely to a wish-list rubber-stamped by EU finance ministers earlier this week, and include notably more precise language about the potential role of the International Monetary Fund.

They are:

- to give the IMF "primary responsibility," together with the Financial Stability Forum, to recommend steps to restore confidence and stability. The IMF should be given the necessary resources and appropriate tools to help countries in trouble.

- registration of rating agencies and surveillance of implementation of codes of conduct relating to them.

- convergence of accounting standards and a review of the application of the "fair value" rule in financial institutions. The "fair value" rule currently requires institutions to value their assets at market value, which creates valuation problems when the market for a given security is not functioning.

- to take steps to ensure that no market segment, territory, or financial institution, including hedge funds, is beyond regulation or surveillance.

- to implement codes of conduct to avoid excessive risk taking in the financial industry, including the sphere of compensation. These codes should be taken into account by supervisors in evaluating the risk profile of institutions.

(Reporting by Jan Strupczewski, editing by Mark John and Andy Bruce)