LONDON, March 31, 2008 (AFP) - Britain and the US are finalising plans to create a working group that will put together proposals to better monitor and regulate the financial system, the Financial Times reported Monday.

Citing unnamed senior British finance ministry officials, the business daily said the plans were agreed Wednesday by British Chancellor of the Exchequer Alistair Darling and US Treasury Secretary Henry Paulson, with the membership and terms of reference of the working group still being finalised.

The paper said that British Prime Minister Gordon Brown and US President George W. Bush will discuss stronger co-operation in dealing with the crisis in financial markets at a NATO summit in Bucharest this week, and again when Brown visits the United States next month.

'We have both been seized of the fact that we need to do something to respond to the financial market turbulence, that we need to generate a shared agenda in the run-up to the spring meetings,' a senior British finance ministry official told the FT.

'However, once the spring meetings are over, we see this new body as one that will meet fairly intensely, sharing information and, over time, pushing through the kind of regulatory action that needs to be taken.'

Darling and Paulson have also reportedly discussed British plans for tailored international supervision for certain banks that do a lot of business across borders.

Britain and the United States have both been hit hard by the global credit crunch sparked by a crisis in the US subprime mortgage market, with American bank Bear Stearns nearly collapsing earlier this month, and Britain having to nationalise mortgage lender Northern Rock in February.