Strasbourg, 07/07/2010 (Agence Europe) - On Wednesday 7 July, the European Parliament took position in favour of a large-scale reform of financial supervision, in its adoption of the amendments of the four largest political groups (EPP, S&D, ALDE, Greens/EFA) to the reports presented to the plenary on 6 July (EUROPE 10175), whilst postponing the final vote on the legislative resolution in order to allow a possible first reading after the summer holidays.
In a separate declaration, the rapporteurs state that the Parliament is prepared to negotiate, but that it is unanimous in its belief that the European authorities must “have sufficient powers to prevent future crises and to strengthen the single market”. “The ball is now in the Council's court” and the Parliament expects it to make compromise proposals. This gesture, the declaration continues, is a “final attempt on the part of the rapporteurs to help the Belgian Presidency” (whose efforts it praises) “to move the member states towards a more satisfactory position”. The declaration points out that the significant progress made after some 20 trialogues is not enough, and that the new supervision architecture must correspond to the vision of the Larosière report. The citizens will accept nothing less: the entire credibility of Europe is therefore at stake. If the Council does not respond to the Parliament's expectations, the latter will be prepared to vote at first reading in September.
In its vote, the Parliament is calling for extended powers for the three European supervision authorities (ESA) which will be tasked with checking up on practices in the banking sector, on the financial markets and in the insurance sector. The ESAs will have powers to make recommendations directly to the banks if the national supervision authorities have not been able to change practices considered incorrect. They may also resolve disputes between national supervisors and carry out checks on transnational financial institutions. Additionally, the EP recommends the creation of a stability fund linked to each of the three above-mentioned sectors, so that the taxpayers will not end up picking up the bill for any financial crises. To facilitate the functioning of these bodies, the EP calls for all of them to be based in Frankfurt rather than scattered across the Union.
As regards the European Systemic Risk Board (ESRB), the Parliament's amendments aim to ensure greater clarity and efficiency in its work. The ESRB should also develop a raft of indicators to make it possible uniformly to identity (including the use of colour codes) the risks represented by certain cross-border financial institutions. The EP would have the possibility to convene the institutions subject to ESRB recommendations to come and explain themselves. Lastly, in order to ensure greater visibility and credibility for the ESRB, it should be chaired by the president of the European Central Bank (ECB).
During the debate, a great many MEPS spoke of the citizens: we are carrying out this reform for the citizens, because we want to protect the “citizen consumers” from the harmful consequences of the financial crisis, said Commissioner Michel Barnier. He agrees that there should be a proactive approach towards certain “harmful” products, and an “open” one on the possibility of banning certain transactions. After three years in operation for the new bodies proposed, the Commission will carry out an evaluation together with the Parliament, to decide whether any changes to their powers are required. What the Americans and the Europeans are doing in the field of financial services is often compared, the commissioner pointed out. He feels that “mutual stimulation” between the two is a good thing: we do not always have the same tools and the same methods, he said, but “our roadmap is the same”. (L.G./transl.fl)