Brussels, 01/02/2011 (Agence Europe) - MEPs on the European Parliament's economic and monetary affairs committee are unhappy about the appointment process for the heads of the three new European supervision authorities (ESAs), one for banking, one for insurance and occupational pensions, and one for the financial markets. On Tuesday 1 February, they wrote to the European Commission, demanding assurances that the appointment procedure will not result in a weakening of the ESAs. If its demands are satisfied by the Commission and also the Council of Ministers, then the EP, which has been extremely active in the fight to ensure the ESAs have genuine bite, will give a positive response in plenary on Thursday on the candidates whose hearings were organised on Tuesday. Grilled for an hour by MEPs, the three candidates passed the test, all stressing the independence of the ESAs with regard to stakeholders and also transparency of the new bodies' work.
This is an institutional challenge and we are demanding procedural guarantees, explained Pascal Canfin (Greens/EFA, France), explaining that if they are not satisfied, then they would vote against the candidates. He was speaking after a meeting behind closed doors of the coordinators of the EP's political parties after the hearings. There is still an institutional problem that the Commission must address, agreed Peter Skinner (S&D, UK). Jean-Paul Gauzès (EPP, France) explains in a press release that the position in the hierarchy of the chairs of the new supervisory authorities in the Community framework and how they are actually appointed must not lead to a de facto weakening. The chair of the economic and monetary affairs committee, Sharon Bowles (ALDE, UK) added: “Remuneration levels are uncompetitive, resulting in too few applications, the 60-year age limit inappropriate, and gender balance has also been lacking. Moreover, the calendar followed did not allow for the European Parliament to have its say on the shortlists presented by the Commission.' At the start of January, her committee expressed doubts to the Commission about the lack-lustre level of the candidates (see EUROPE 10299).
Steven Maijoor: ESMA would have cut the risk of a crisis - What would you actually have done during the financial crisis if the European Securities and Markets Authority (ESMA) had existed then?, Udo Bullmann (S&D, Germany) asked Dutchman Steven Maijoor. He said the ESMA would have been able to substantially reduce the danger of crisis and would have expected “better ratings” from the credit rating agencies. Rating agencies are now directly supervised by the ESMA in Paris. Maijoor said they would also have been able to ban certain derivatives, mentioning his experience at the helm of the Autoriteit Financiële Markten. He recommended a cautious approach to banning financial products because consumers want to have choice. He said that tackling the regulatory supermarket among member states (all seeking investors) would need to be tackled, and the MiFID Directive on financial products had boosted competition among stock exchanges but had shrouded pricing in ever greater mystery.
Andrea Enria: Top EBA priority is the bank stress tests - The candidate to head the European Banking Authority (EBA) in London, Italy's Andrea Enria sees four ways of making the bank stress tests (coordinated by the EBA) more credible. There would be genuine communication of the results. The scenarios considered would be far “stricter” although those used during the previous stress tests were already “severe”. The stress tests would be peer-reviewed and analysis of cash flow, a “very delicate” issue because there is not yet any international agreement on this, should be subject to a “separate test”.
How can proper supervision of off-balance sheet banking be achieved?, asked Sven Giegold (Greens/EFA, Germany). Enria said that the inability to ensure coordination of the processing of structured finance is a major failing of financial supervision. He warned against the danger of increasing bank capital requirements (the Basel III rules) which could end up shifting risk to shadow banking. In response to Gianni Pittella's (S&D, Italy) concerns about the impact of increased regulation on the financing of the real economy, Enria said that small and medium-sized banks, which are the ones granting the majority of loans to small business, will be less affected by the changes than the big banks, but he hoped to strike a balance between stepping up regulations and banks' ability to lend. He promised that the legacy of the late Tommaso Padoa-Schioppa, former Italian finance minister and dedicated European, would act as his rudder.
Gabriel Bernardino: EU needs better pension legislation - The candidate to chair the European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt, Portugal's Gabriel Bernardino, mentioned several areas where EU legislation needs tightening up, like the security of pensions and the role of staff in managing pension funds. Asked by Astrid Lulling (EPP, Luxembourg) about the portability of pensions, he regretted that the attempts to achieve harmonisation had not been successful, mainly for political reasons. Bernardino challenged the ideas of Giegold, who said the EIOPA was a true EU body rather than a network of supervisors. Bernardino said that EIOPA would work in the European interest and investigate infringements of EU law, but decisions will be taken by national supervisors. On European insurance companies' access to markets in North America, an area of concern for Wolf Klinz (ALDE, Germany), Bernardino said the Solvability II Directive provided a way of putting pressure on the EU's American partners. (M.B./transl.fl)