Brussels, 03/12/2014 (Agence Europe) - At the European Parliament, Cora van Nieuwenhuizen (ALDE, the Netherlands), rapporteur on the proposed regulation to tighten up governance on financial benchmarks, does not wish to make do with quantitative criteria to define the so-called critical benchmarks, which will be subjected to tougher rules.
At the economic and monetary affairs committee of the EP on Monday evening, the Dutch Liberal explained that the benchmarks with a higher reference value (more than €500 billion) should be considered critical, but “this rigid quantitative pressure makes no sense in a rapidly evolving market”. She went on to call for qualitative criteria to be taken into account to assess the systemic importance of the benchmarks.
Kay Swinburne (ECR, UK) called on her colleagues not to reinvent the wheel and to look at what has been done in the United Kingdom, where the LIBOR rules lay down extremely strict standards, she said. “Imposing disproportionate requirements on less critical benchmarks would be expensive and unnecessary”, she added, adding that these should nonetheless be more transparent.
For the EPP, Sweden's Gunnar Hökmark, who was speaking on behalf of of Ludek Niedermayer of the Czech Republic, said that the text should be brought closer to the provisions of the G20 and, in particular, that the scope of application should be restricted. Jonas Fernandez (S&D, Spain) argued that the definition of the critical benchmarks did not seem appropriate. Taking solely a quantitative criterion as a basis would leave a “regulatory void”, he said. He added that the provisions vis-à-vis third countries were incomplete. On this point, the rapporteur agreed with him. No jurisdiction outside the EU intends to bring in an equivalent regime to what the EU is planning to set in place.
What will the EFMA's role be? Lastly, the British MEPs Molly Scott Cato (Greens/EFA) and Neena Gill (S&D) argued in favour of a greater role for the European Financial Markets Authority (EFMA). The Commission initially planned to entrust the supervision of the benchmarks to the EFMA, but then decided against this (EUROPE 10923). Scott Cato felt that the Authority should have direct control of the most critical benchmarks.
Van Nieuwenhuizen promised that her draft report would be available at the end of the week. The date for amendments to this text to be tabled has been set for 20 January 2015. (EL)