Swiss join UK, U.S. in questioning banks

Darling instead said the fix should be system-wide, pushing for more transparency, stronger national and international regulation, better means of dealing with failures and a greater focus on system-wide risks.

Washington has forced banks to boost their capital cushions to ensure they could weather any future economic downturn, instituting "stress tests." On Wednesday, U.S. President Barack Obama laid out his vision for recrafting regulation.

"We are called upon to recognise that the free market is the most powerful generative force for our prosperity -- but it is not a free licence to ignore the consequences of our actions," Obama said.

European Union leaders will also approve new rules to tighten supervision at a two-day summit starting on Thursday, to safeguard an economy they said was deep in recession.

"Much valuable work to mitigate the consequences of the crisis has already been carried out, but it is crucial to keep up efforts," Czech Prime Minister Jan Fischer, whose country holds the EU presidency until the end of this month, wrote in an invitation letter to leaders.

POOR DATA

Consumer sentiment in Europe has risen in recent months, but industrial data and company results have shown the depth of the recession ushered in by the financial crisis.

In Britain, retail sales fell in May, driven by falls in clothing and footwear, the Office for National Statistics said. Public borrowing reached a record high.

A business group predicted the British economy would contract by 3.8 percent this year and make only a muted recovery in 2010.

That chimed with a report from Italy's employers' federation, who saw a loss of around 1 million jobs in the two years to the first quarter of 2010.