Brussels, 29/01/2008 (Agence Europe) - Speaking at a conference on changing financial markets organised by Assonime, Houston Consulting Europe and Merrill Lynch, EU Internal Market Commissioner Charlie McCreevy said: 'One thing that is absolutely clear to me is that we must not be afraid to question the adequacy of our existing measures and, if necessary, change them'. He said it would back any sensible and necessary changes to the regulatory framework but warned against over-hasty and disproportionate reaction before the full outcome of the financial turbulence was fully known.
The Commission will unveil in the next few months (before the summer) an amendment to the Basel II Directive on own capital requirements. David Wright, Deputy Director General for the Internal Market at the European Commission, said: 'We will bring forward amendments to the Capital Requirements Directive no later than October this year,' according to a report in Reuters. Changes will be made to liquidity risk assessments and increased requirements on the publication of information for control authorities of bank subsidiaries. Another area of new legislation is expected but does not directly result from the current turbulence on the money markets, namely a review of Directive 85/611/EEC on collective asset investment funds, in order to favour the cross-border sale of such funds. Asked by this newsletter, Commissioner McCreevy said the draft legislation would be unveiled in the next six weeks.
Andrej Bajuk, Slovenian finance minister, said that European citizens expected results and the Commission had to come up with them. He listed the planed work of the Slovenian Presidency on financial stability (see separate article), adding that it was in the EU's interests to continue to remove obstacles to the European integration of the financial markets in that such integration, along with liberalisation, was a crucial element of European competitiveness.
Alberto Giovannini of Unifortune investment fund called for a degree of humility from players on the financial markets who should be able to make profit, of course, but should also take care of the market and accept lower profit margins. In order to reduce the existing gap between markets and control authorities, the control authorities should be provided with rapid, recent and detailed information, he said. Wolf Klinz MEP (ADLE, Germany) said there should be three watchwords for the EU's response to the financial crisis, namely transparency, responsibility and stability. Banks selling at-risk financial products should assume full responsibility for them, even if they have been sold on to other clients. Mr Sabatini, from the Italian finance ministry, mentioned Tommaso Padoa Schioppa's letter to the ECOFIN Council in December 2007 outlining practical suggestions on how to boost cooperation among national control authorities (see EUROPE 9557).
On the last point, Charlie McCreevy said he backed a strengthening of the EU networks of cross-border supervisors: 'The EU committees of supervisors, so-called Level 3, need both reinforced political accountability and enhanced internal decision-making procedures. Colleges of supervisors could be implemented for large banks. At the same time, national supervisors must have the powers they need to fulfil their tasks. Member States share these objectives.' (M.B.)