Brussels - European Union leaders were gathering in Brussels on Friday in a bid to forge a common position on overhauling the world financial system and avoiding a repeat of the current market turmoil.

During their lunchtime summit in Brussels, leaders were to discuss a revised paper submitted by the French presidency of the EU, which sets out five broad guidelines.

In particular, the paper calls for strengthening the International Monetary Fund's (IMF) supervisory role and boosting funding for the Washington-based body with additional contributions.

It also proposes stepping up supervision of global rating agencies, harmonizing international accounting standards and ensuring that controversial geared funds, some of which make high-risk investments, fall under supervisory controls.

France also wants to force managers to avoid excessive risk-taking through a new code of conduct and to ensure that no financial product or territory, including tax havens, "escape regulation or supervision."

The debate in Brussels is expected to focus on how much regulation is needed, and whether such supervision should be handed over to international bodies or not.

"We don't need a global supervisory body. We need rules which have worldwide effects," Luxembourg Prime Minister Jean-Claude Juncker, the powerful chairman of the Eurogroup, an informal grouping of the 15 nations using the euro, told German radio ahead of the meeting.

The EU proposals under discussion in Brussels are to be presented at a November 15 meeting in Washington of the Group of 20 government chiefs and presidents, which has been called to consider ways of revamping key parts of the international financial structure.

EU leaders want the Washington summit to produce a concrete timetable for an agreement to be presented at the next meeting of the Group of Eight leading industrial nations, scheduled for July in Sardinia, Italy.

Concrete proposals on how to reform global finance should be submitted "within 100 days" of the Washington meeting, diplomats in Brussels said.

The EU leaders' sense of urgency about hammering a quick fix comes amid evidence that a sharp economic downturn is taking root as a result of the turbulence which engulfed world markets in recent months. (dpa)