Source: Xinhua
03-05-2009 13:57
Special Report: Global Financial CrisisBRUSSELS, March 4 (Xinhua) -- The European Commission proposed on Wednesday a series of measures to tighten financial supervision across the European Union (EU) in order to prevent recurrence of the current financial crisis.
Based on recommendations tabled last week by a high-level group-headed by former Bank of France governor Jacques de Larosiere, the commission called for a supervisory system combining much stronger oversight at EU level with maintaining a clear role for national supervisors.
It backed the de Larosiere group's proposal to set up an early warning body under auspices of the European Central Bank (ECB) to identify and tackle systemic risks. It also supported the group's recommendation for a core set of regulatory standards throughout the EU.
Under the de Larosiere group's recommendations, there should be two new pan-EU supervisory bodies, with one to monitor system-wide risks and the other to monitor day-to-day supervision of banks, insurers and markets.
De Larosiere recommended introducing the system over three years, but the commission wants to accelerate the pace.
"We say this should be done immediately," European Commission President Jose Manuel Barroso told a press conference in Brussels on Wednesday.
"We are suggesting this should be done immediately. If we do not do it now we will never do it. We cannot postpone the reform," he added.
The commission hoped EU leaders could endorse its proposals at their summit later this month, paving the way for legislative actions.
In April the commission will bring forward initiatives already in the pipeline on hedge funds, private equity and remuneration structures.
Following an impact assessment, the commission will put forward in June a detailed timetable for further measures based on the de Larosiere report.
It will bring forward proposals in the autumn on the new supervisory framework and on issues including liquidity risk and excessive leverage, further reinforcing protection for depositors and policyholders, and effective sanctions against wrongdoing.
"This is a serious crisis, but there is a way out," Barroso said. "We must send a strong signal to our citizens, businesses and the global community that there is a way out of this crisis."
Spearheading an effort to reform the international financial system, the EU also wanted to have its proposed measures included in the global push.
EU leaders should agree on a number of areas where Europe can and should give a firm lead at the London summit of the G20 group of industrial and big emerging countries on April 2, the commission said.
The EU should make a united push to improve the global financial and regulatory system, it said.
"There should be no financial entity that escapes from financial regulation, neither in Europe nor the rest of the world," Barroso said.
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