Brussels, 03/06/2008 (Agence Europe) - At an expert hearing on Tuesday 3 June 2008, the European Parliament's economic and monetary affairs committee examined the Lamfalussy Process and surveillance of the financial markets, an issue to be examined in a report by Ieke van den Burg (PES, the Netherlands) and Daniel Daianu (ALDE, Romania).
As part of the process of responding to the financial crisis, the control structure and institutional debate will need to be examined in the light of three questions, said Tommaso Padoa-Schioppa, namely: Should surveillance powers be national or European? Should there be a single agency or several specialist agencies? Should bank surveillance be the remit of the European Central Bank (ECB) or of a special agency? Padoa-Schioppa, who used to be Italy's finance minister, said that bank surveillance should rest in the power of national central banks. There is a raft of weaknesses in the idea of concentrating all the powers in the hands of a single agency, he said, calling for a twin peak approach of giving two separate entities powers for prudential regulation and stability on the one hand, and powers over the day-to-day functioning of the markets and consumer protection on the other. At present, there is little coherence in surveillance. Supervision involves neither 'super' in the sense of 'from above' nor 'vision' in the sense of 'view' because a single observation post does not exist, he said, not one of the ten big banks is subject to any single surveillance body. To remedy this, he said that first and foremost, the existing potential in the Lamfalussy Process should be exploited. He said that debate over the transfer of powers at EU level was suffocating the only real question, namely genuinely implementing the Lamfalussy Process as planned.
In order to achieve greater coherence at EU level, the work of the central banks and the bank surveillance authorities has to mesh in an appropriate manner, said Peter Praet, Director of the National Bank of Belgium and chair of the ECB's Bank Surveillance Committee (BSC) that backs the ECB's decision-making bodies and helps ensure prudential control of lending establishments and stability of the financial system. It could play a more active role, he suggested, along with the Eurosystem. The aim would be to have strong permanent domestic groups, cross-border supervision networks (colleges of supervisors) and, at EU level, true symbiosis between the Committee of European Banking Supervisors and the ECB's BSC.
The Level Three committees (CEBS, CESR and CEIOPS) are responsible today for coordinating legislation but are held back by their legal status, resources and diversity of opinion, said Michel Prada, President of the French financial markets authority. He said the roadmap being considered by the ECOFIN Council was a good roadmap but it was insufficient (see EUROPE 9660).
While approving the twin peak model, Piia Noora Kauppi (EPP-ED, Finland) agreed that the ECOFIN roadmap was not ambitious enough and the system was too voluntary and too intergovernmental.
Wolf Klinz (ALDE, Germany) and Margarita Starkevièiûtè (ALDE, Lithuania) asked about who was ultimately responsible. They also asked about the use of public funds for bailing out failing businesses (Northern Rock). The president of the parliamentary committee, Pervenche Berès (PES, France), underlined the urgency of taking action on the banking markets and mentioned strengthening the European Committee of Banking Supervisors (CEBS) and better coordination between this committee and the ECB. Mr Padoa-Schioppa clearly stated that it would be useful to “merge” the CEBS and the BSC. (A.B.)