France's finance minister is urging the EU to adopt tougher investor protection rules in the wake of heavy losses linked to the alleged fraud by U.S. money manager Bernard Madoff.
Finance Minister Christine Lagarde sent a letter Monday night to the EU financial services chief, Charlie McCreevy, calling for an EU directive on investment rights.
"The Madoff affair illustrates the difficulty of localizing investments, identifying their owners and determining the respective responsibility at each link of the chain," the letter said. "It also underlines the necessity of promoting a corps of common rules" on investor rights and trustees' responsibilities, it said.
Lagarde mentioned in the letter "certain" EU member nations who had a different interpretation of the rules and who she suggested were not properly compensating investors. The warning appeared directed at Luxembourg, where some Madoff-linked funds were registered. France and some other European countries have in the past criticized bank secrecy laws in countries such as Luxembourg and Switzerland.
"It is essential that Europe presents rapid and coordinated responses to preserve the confidence of depositors in the context of the free trade of financial products across Europe," she said.
"What needs to be done is a harmonization of all our directives," Lagarde told reporters. "We don't want disparity, we don't want discrimination from one country to another."
McCreevy's office in Brussels had no immediate response Tuesday.
"I hope to have a quick response" from McCreevy, Lagarde told reporters Tuesday.
Madoff was arrested in December and charged with running a $50 billion fraudulent securities scheme. On Monday, a New York judge allowed him to remain confined to his Manhattan penthouse, rejecting a bid to jail him.
Many European investors were among those who lost money in Madoff-linked funds. A French financier, Rene-Thierry Magon de la Villehuchet, committed suicide after losing more than $1 billion belonging to his aristocratic family and his wealthy — even royal — clients.
Lagarde's letter was also sent to Luxembourg's Prime Minister Jean-Claude Juncker, who presides over meetings of the 16 nations that use the euro, and Czech Finance Minister Miroslav Kalousek, whose country holds the rotating EU presidency.
Lagarde also said "the regulation, supervision, and transparency movement that has started in Europe ... has momentum" and should be spread to other countries.
She said the French government was seeking legal clarifications before deciding whether to try to recover money French investors lost via Madoff-linked funds from Swiss banks UBS and HSBC.
AP Business writers Greg Keller in Paris and Raf Casert in Brussels contributed to this report.