LONDON (Reuters) - French President Nicolas Sarkozy and British Prime Minister Gordon Brown are expected to call for greater transparency in financial markets on Thursday in an effort to tackle the global credit crunch.
Sarkozy, seeking to boost Anglo-French relations after strains over the U.S.-led invasion of Iraq, is also likely to press for help in trying to persuade Washington to halt a slide in the dollar that is making European exports more expensive.
He went on a charm offensive on the first day of a state visit to Britain on Wednesday, pledging in a speech to the British parliament to send more troops to fight the Taliban in Afghanistan and calling for a "new Franco-British brotherhood."
Britain and the United States have been urging NATO allies to increase troop contributions to the alliance's force in Afghanistan, where the Taliban appear to be growing in strength.
Queen Elizabeth welcomed Sarkozy and his wife Carla Bruni with a state carriage procession to Windsor Castle, near London, and then hosted a banquet for the couple.
Brown and Sarkozy have struck up a good relationship since both came to power last year, but the popularity of both leaders has dropped since solid starts. Sarkozy's popularity has sunk since he married Bruni, a supermodel-turned-singer, last month.
The two will meet on Thursday at leading English soccer team Arsenal's spectacular new London stadium, chosen as a symbol of cooperation because it has a French coach, Arsene Wenger, and several French players.
British officials said Sarkozy and Brown would discuss the global credit crunch that has hit banks round the world and forced Brown to nationalize mortgage lender Northern Rock.
"(They will) call for greater transparency in financial markets and, as a first step, full and immediate disclosure of the scale of write-offs by banks," said one official.
Sarkozy and Brown are concerned confidence in financial markets is being hit by uncertainty over the scale of bad debts on banks' books that some estimates put as high as $600 billion.
Banks have written down more than $125 billion of assets due to the credit squeeze sparked by so-called sub-prime mortgages in the United States.
On Sarkozy's concern about the slide in the dollar affecting European exports, Britain rejects managing foreign exchange levels and prefers to leave it to the markets.
Also on Thursday's agenda will be reform of the United Nations Security Council.
The officials said Sarkozy and Brown want to make it more representative, including permanent representation for Africa. France and Britain are both permanent veto-wielding members of the council.
Sarkozy is seeking close ties with Britain to supplement the Franco-German alliance that has traditionally driven the 27-nation European Union.
Analysts say that may be because he has difficulties with German Chancellor Angela Merkel.
Relations between Britain and France were strained when Sarkozy's predecessor, Jacques Chirac, opposed the U.S.-led invasion of Iraq in 2003.
Several British newspapers marked Sarkozy's visit by printing an old picture of Bruni posing nude. But fashion gurus hailed the elegance of the Dior outfits she donned for the occasion, likening her to Jackie Kennedy.
Have your say: here
Additional reporting by David Clarke, Paul Majendie, Sophie Louet and Jeremy Lovell in London and Francois Murphy in Paris; editing by Ralph Gowling