Brussels, 16/06/2009 (Agence Europe) - On Tuesday 16 June, at the presentation of the Belgian authorities' recommendations on financial supervision developed by an experts' group presided by Baron Lamfalussy, the Belgian prime minister, Herman Van Rompuy declared, “By the end of this week, the European Council must give a clear mandate to the Commission to start the urgent creation of the two institutions. Firstly, a powerful and effective European systemic risk board centred around the ECB. Secondly, a European system of supervisors having the power of binding mediation”. According to Van Rompuy, “the financial crisis showed that cooperation between micro- and macro-prudential supervision needs strengthening” through improved flow of information between micro- and macro-level, effective mediation between both levels and specific instruments capable of coping with the particular problems of systemic institutions.
The Lamfalussy report expresses its “total support” for the recommendations of the de Larosière report on reform of the European architecture for financial supervision on which the European Commission legislative proposals expected out in the autumn, are based (EUROPE 9917). It supports the setting up of a decision-making power that is binding on the future European supervisory authorities which take over from (CESR, CEBS, CEIOPS). With regard to the sharing of the financial burden by member states during the safeguarding of a cross-border bank, the Lamfalussy report believes it highly desirable that a “European deposits guarantee system” is set up and financed ex ante by the pan-European financial institutions. Belgian experts believe such a system would have the advantage of “providing a significant degree of risk diversification and equal treatment between the big and small countries”.
José Manuel Barroso referred to the “encouraging results” of the most recent Ecofin Council which obtained an “overwhelming majority” from member states in support of the future European supervisory authorities as a binding mediation power in the event of disagreement between national supervisors. This element constitutes a political raft of legislative proposals for the future. A raft that the European Council is not expected to tackle in the face of the hostility expressed by the United Kingdom, the main European financial power outside the Euro-zone. The summit's draft conclusions do not enter into this level of detail and Mr Barroso indicated that he hoped, “we obtain consensus to push these proposals forward”. He did recognise the “enormous resistance” but pointed out since the eruption of the crisis, member states had shown a willingness to carry through financial supervisory reform. (M.B./trans/rh)