Brussels, 01/04/2010 (Agence Europe) - During a dinner with the British banking sector at the City of London on Wednesday 31 March, European Internal Market Commissioner Michel Barnier specified his position regarding the regulation of derivatives and especially credit default swaps (CDS). “We are also studying the effects of naked credit default swaps on sovereign debt. (…) That is why we have put a taskforce in place to look further at this issue. I may address this issue as part of my general work on shortselling. And let me underline that I don't speak about a ban. I speak about a framework of rules and transparency”, he said. Barnier reiterated his intention to present a legislative proposal by the summer in order to increase transparency and standardisation of derivatives, of which 80% of the market is exchanged by mutual agreement. This proposal will make standardised derivatives compensation compulsory within the central counter-party clearing houses (CCP), and the archiving of all mutual transactions within trade registers.
Bank tax. The commissioner will present a note on the prevention/management/resolution of financial crises to the European finance ministers who are to meet informally mid-April in Madrid. “I strongly believe that banks must contribute themselves to the cost of future crises”, he said, pointing out that he would do the spadework leading to a banking levy and/or the creation of rescue funds alimented by the private sector. Germany announced on Wednesday that it hoped to introduce a bank tax aimed at alimenting a rescue fund intended to cover the costs of a crisis caused by failure of a bank. The level of the levy should depend on the risk exposure of credit establishments. A legislative proposal will be submitted before the summer break.
During a working breakfast with non-banking financial actors, Barnier said on Thursday 1 April that he would make a Green Paper on the governance of financial companies available for consultation. This document, which will, in a second phase, be extended to non-financial ventures, will tackle themes such as internal audit, the responsibility of shareholders and supervisors' possibility to intervene when the structure of an entity becomes too complex.
IASB. Michel Barnier also represented the European Commission at the first meeting of the surveillance group of the International Accounting Standards Board (IASB), an international body responsible for developing international accounting standards. He delivered a three-fold message pertaining to: - international convergence of international financial reporting standards (IFRS), mainly with American norms; - acceleration of the work for revision of the IFRS 9 norm on financial instruments in order to take into account not only the market value but also traditional value; - and reform of IASB governance which should make more room for public players responsible for implementing accounting standards. On this point, Europeans take the view that it is not necessary to speed up the process before resulting in the appointment, in 2011, of Sir David Tweedie's successor at the head of the IASB. “This is not a matter of passport or nationality”, but it is appropriate to discuss in advance and in detail what kind of person is sought, it is said at the Commission. Michel Barnier also held a meeting with the president of the Securities Exchange Commission, Mary Schapiro. (M.B./transl.jl)