Britain and France vowed to respond to financial market problems on Thursday and called on banks to declare the full extent of the damage to their operations caused by the credit crunch.
Prime Minister Gordon Brown called his relationship with President Nicolas Sarkozy an "entente formidable" as the French leader wrapped up a two-day state visit that both men hailed as launching a new era of cooperation.
They agreed to try to enlarge the U.N. Security Council by getting permanent seats for Germany, Brazil, India, Japan and representation for Africa.
In sharp contrast to the mutual suspicion that has so often tainted Anglo-French relations, the body language between the two leaders could not have been warmer.
Compliments flowed in a press conference staged at the futuristic stadium of Premier League soccer club Arsenal in north London. The club is managed by Frenchman Arsene Wenger and has several Francophone players in its squad.
An emotional Sarkozy hailed the "well deserved" reception given to his new wife, model-turned-singer Carla Bruni who he married last month after a whirlwind romance that dented his popularity in opinion polls.
Leaders around the world are trying to calm fears of a global economic downturn stemming from a credit squeeze sparked by a U.S. housing loan crisis. But rich nations have yet to agree a joint action plan.
"We agreed the need for greater transparency in financial markets to ensure banks make full and prompt disclosure of the scale of write-offs," Brown and Sarkozy said in a statement.
Banks have written down more than $125 billion (62 billion pounds) of assets due to the credit squeeze. Some estimates put the scale of bad debts on banks' books as high as $600 billion.
