Brussels, 28/04/2010 (Agence Europe) - MEPs on the European Parliament's economic and monetary affairs committee have decided to postpone by a few days or even weeks the vote on three crucial proposals in the EU's new package of legislation known as CRD III (on hedge funds, speculative funds and increased capital requirements) to overhaul the European financial system. The three proposals are crucial to the EU's response to the financial crisis. If all goes according to plan, they will vote on Monday 10 May on draft reports on hedge funds and the financial supervision package. The vote on the CRD III Directive has been postponed until June.
Will these delays have an impact on the European legislator's ability to enshrine its desire to reform the financial system? When it comes to hedge funds, the Spanish Presidency is hesitating as the United Kingdom opposes this. Nearly 80% of European hedge funds are located in the UK, which is in the throes of a general election campaign. Given the domestic problems facing Belgium, which will be taking over the presidency of the EU from Spain on 1 July, agreement before the end of June looks crucial if the financial supervision package is to be signed and sealed in order to be put into force in 2011. Brandishing the threat of a badly thought-out turning of the regulatory screw that would snuff out the fragile economic recovery, the banking industry is dragging its feet on increased capital requirements for at-risk deals and rules governing pay and bonus policy. Not to mention the question of whether the private sector should contribute to the cost of bailing out the financial system. A diplomat commented recently that it is not out of the question that people will leave for their summer holidays without adopting a single item of legislation, which would mean that the EU, which has been swanning about “showing off”, claiming to be a world leader when it comes to financial reform, would not look so smart when it turns up to the upcoming G20 meetings. Quizzed by this newsletter on Tuesday 27 April, the chair of the EP's economic and monetary affairs committee, Sharon Bowles of the UK, said that the committee preferred quality to speed. (M.B./transl.fl)