A top EU official warned that financial scandals like those to have hit the United States could happen in Europe and said he wanted to gather European regulators on July 23 to discuss ways to combat corporate abuse.
After the scandals at Enron and WorldCom, the EU is to host a Brussels meeting at the initiative of Internal Market Commissioner Frits Bolkestein.
Bolkestein, in charge of financial services regulation at the EU executive, is expected to tell the officials that financial authorities should avoid "misguided activism" in dealing with recent market developments.
But he warned governments and regulators on Thursday against being complacent about Europe's ability to avoid the type of crisis that has hit the United States and asked them to renew efforts to ensure adequate investors' protection.
"Only the very foolish would pretend that recent events in America could not or will not happen here," Bolkestein said in a speech to a financial forum in Paris.
"Without proper levels of investor protection, we risk financial scams such as those we have seen in recent years involving pension and mortgage mis-selling, pyramid savings schemes and US stocks that have collapsed from billions of euros of capitalisation to peanuts in a flash."
Bolkestein said the current crisis would not disappear overnight, but warned against exaggerating the extent of current market instability and uncertainty.
The Commissioner renewed his support for the International Accounting Standards system, due to be adopted by EU listed companies in 2005. It is a system of accounting rules that the United States does not recognise but that the EU believes can give an accurate picture of a company's true value.
He said he would again meet officials at the Securities & Exchange Commission, the US market watchdog, to discuss possible acceptance by the United States of IAS standards.
Bolkestein also said he would be looking more intensively at the way the audit profession is regulated.
He said the Commission would in the next few weeks publish a policy document with standards for the supervision of auditors at national level and possible EU supervision.
The Commission is also expected to look into corporate governance issues after a report by a group of company law experts due in September.
A directive on regular and transparent company reporting is also expected before the end of the year.