EU mulls regulatory reform

Brussels is considering an overhaul of the collegiate system of financial
regulation whereby different national securities regulation act in concert.

Maintaining the status quo in EU regulation and supervision is not a suitable
option for the way forward, Jean-Claude Trichet,
Central Bank
(ECB) president, said at the opening of the
Eurofi Conference

‘Instead, cross-border convergence and co-operation will need to continue to
be stepped up significantly to safeguard financial stability and foster further
integration and competitiveness of the European financial market,’ he said. ‘The
Lamfalussy framework provides the right institutional setting in this respect.’

The Lamfalussy process is the system set up in 2001, and there are fears that
a review might lead to one overall European regulator.

The Eurosystem would publish its formal assessment – focusing on the banking
sector – ‘within the coming days’. It was ‘convinced the EU framework would
effectively meet the challenges of the credit crunch ‘only if divergences in
supervisory requirements and practices are reduced to a minimum’.

Key issues under consideration included strengthening the role and operating
mechanisms of the Committee of European Banking Supervisors (CEBS); improve the
level of regulatory convergence; and further enhance the arrangements for
cross-border co-operation and information-sharing with respect to the major
cross-border banking groups in the EU.

Further reading:

Ussher rejects EU financial regulator

Europe set for ‘super regulator’

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