Brussels, 28/07/2008 (Agence Europe) - In the wake of the financial crisis, the European Parliament wants to take a more proactive role in ongoing EU work to restore confidence in the financial system and step up integration in the supervision of cross-border financial companies. After the summer holidays, it will be adopting an own initiative report asking the European Commission to unveil new legislation in three areas before December 2008, namely introducing minimum own resources requirements, transparency for complex financial deals, governance rules for financial stakeholders etc as the foundations of EU legislation; the management of risks that impact on financial stability; and the supervision of cross-border financial groups. This will send a strong political message to the European Commission, which is already working on a review of the directive on minimum capital requirements and the introduction of an EU registration system for rating agencies.
EU integration of financial services markets has been progressing apace since the introduction of the financial services action plan and the 46 biggest banks now hold 68% of banking assets in the EU. This trend is continuing to grow but the EU supervisory system, essentially still based on national structures, is not making such speedy progress. Written by Ieke van den Burg (PES, the Netherlands) and Romanian Liberal MEP Daniel Daianu, the EP's draft report calls for the creation of colleges of supervisors for the 40 to 50 biggest cross-border financial groups or holdings. They call for clear criteria for identifying the cross-border groups or holdings for which such colleges will be mandatory. The colleges should be chaired by a lead supervisor from the Member State where the central administration or the main EU office of the cross-border financial group or holding is established. The colleges will decide and vote on a qualified majority (qmv) basis taking account of the relative proportion of the group's assets in the different college members' Member States, the relative proportion of the group's assets in relation to a Member State's GDP and/or sixe of the financial market concerned and the relative size of deposits in the various Member States.
One of the draft report's original ideas is the establishment of a Permanent EU College Coordination and Mediation Committee (CCMC) to act as the mediator and manager of the system of colleges in order to establish the necessary consistency, coherence and efficiency in the supervision of large groups. It would have the powers to mediate and resolve conflicts between college members. The co-rapporteurs consider the setting up of a complaint and/or appeals procedure whereby banks, supervisors and consumers could lodge a complaint with the CCMC but general policy issues concerning regulation or supervision would remain the remit of the three EU supervisory committees (CEBS, CESR and CEIOPS).
The idea of gradually changing the financial supervision system in the EU has been welcomed by economic operators, many of which want to go further. The introduction of a genuine EU financial supervision system will require the setting up of colleges of supervisors, admits Deutsche Bank (of Germany) in a policy statement, adding that in order for the lead supervisor to be able to coordinate and plan the college's supervisory work, he or she will have to have the final say whenever the agreement cannot be reached among the college members. In a letter to the co-rapporteurs at the end of July 2008, the BusinessEurope lobby group says that it favours the idea of a legal basis for the colleges of supervisors and for there to be a division of labour among supervisors in each college, but it likes the idea of a one country, one vote system of qmv and queries the value-added of a CCMC vis-à-vis the three existing EU committees (CEBS, CESR and CEIOPS). (M.B. transl fl)