More protectionism or more Europe?
Ten years ago the discussion started about the construction of the European market for Financial Services; the Parliament warned that the integration of the markets, without integration of the supervisory mechanisms, would originate a crisis of the system. History has confirmed our fears.
Luckily, the European Institutions agree that the first task of the new European Banking Authority (EBA) shall be to elaborate a homogeneous legislative body to end the legal front with which the Financial Institutions in the EU encounter.
We also agree that the Authority shall be able to directly address the private institutions in cases of infringement of the communitarian ordinance, disagreement with national supervisors, and other emergency situations in cases where the national supervisor did not do its job.
The agreements between Parliament and Council finish here and it is difficult that they will come to an agreement regarding the supervision of Financial Institutions whose bankruptcy may collapse the financial system, the so called "too big to fail" institutions. There are only two options to exit this muddle: to give the supervisor of the hosting country the ability to strictly control foreign banks, this would mean the end of the Euro-pean Passport, or alternatively, to give the European Authority the power to control the Financial Institutions whose bankruptcy may affect the system. Undoubtedly, this is more protectionism or more Europe.
The Commission gives the supervision of cross border institutions to Supervisory Colleges composed by the European Authority and the National Authorities. The Members of the European Parliament want to introduce mediation powers in case the National Supervisors do not reach an agree-ment. In my opinion, this is the way to follow, and the Icelandic and Greek case confirm it, because they showed that a supervisor of a small country cannot effectively control the cross border activities of its banks.
Moreover, the European solution needs to solve the issue of the European responsibility in cases of accidents of an authority depending on the control of the European Banking Authority. Therefore, and to protect the budgets of the taxpayers, I propose to establish a European Fund, financed by the financial institutions, that would protect the depositors and rescue the institutions in difficult situations when their failure can put the system in danger. This Fund, in due case, could issue debt.
As a conclusion, I had two options while writing my report: try to guess the wishes of the Council to reach a fast agreement or, use this opportunity to jump ahead in the process of the European construction. I have a very strong European spirit. The Spanish Presidency is now in a position to reflect in a specific regulation its intention to reinforce the European governance and to discipline the markets.
martes, 2 de marzo de 2010
Artículo en Deutsche Bank Brussels Newsletter
Este es el artículo que me han publicado en Deutsche Bank Brussels Newsletter.