Publicado por Exchange News Direct/EXNEWS (24/02/2010)

More Powerful EU Financial Supervisory Bodies And Less National Interest, Demand MEPs

The need for more ambition and more Europe was the main message to emerge from debates on the EU financial supervisory package at Parliament's Economic Affairs Committee on Tuesday. Calls for tougher legislation and a bigger transfer of powers to the EU supervisory level were among the chief demands made by the four MEPs presenting their draft reports.

All four EP rapporteurs questioned the Council compromise that emerged from December's Ecofin meeting. The safeguard clause protecting Member States' fiscal powers, which the rapporteurs consider over-restrictive, was the major bone of contention. Another concern was the possibility of geographical fragmentation, as the Commission is currently proposing different cities for each authority.

One supervisory system in one city

The watchdog system being proposed by the Commission is made up of three separate micro-supervisory bodies for the monitoring of banking, insurance and market institutions respectively and another macro-supervisory body for the monitoring of systemic risk. Although willing to preserve these four bodies, the rapporteurs suggest grouping them together under the European System of Financial Supervision proposed in the de Larosière report on financial supervision in the EU. Consequently they also argue - unlike the initial proposal - that a common location should be chosen, with the European Systemic Risk Board report proposing that this be Frankfurt. This would not only reduce operating costs but could also be very useful in the event of a crisis necessitating emergency action.

Safeguard or wildcard?

As it currently stands the safeguard clause found in the proposed texts establishing the three micro-supervisory authorities offers a quasi-veto for Member States regarding the decisions of these authorities.
The rapporteurs therefore propose that the opportunity to invoke such a safeguard be limited and that the Member State concerned be required to provide an impact assessment detailing the extent to which the decision impinges on its fiscal sovereignty.

Stronger micro-supervisory authorities

Apart from the very important question of the safeguard clause, the three rapporteurs for the micro-supervisory authorities proposed a number of other improvements to the Commission's proposals, mostly to increase the role of supervision at EU level.
The reports propose that these authorities also be tasked with preventing regulatory arbitrage and that they should have a power of initiative to undertake stress tests. They should also represent the EU during international dialogues of supervisors. To varying degrees the rapporteurs would confer mediating powers on the authorities with regard to conflicts between national supervisors, with the report on the banking authority going furthest by suggesting a binding mediating role.

All reports give a more important role to the European Parliament, particularly by entrusting it with the task of overseeing the activities of the authorities.
Specifically for the banking authority, the rapporteur proposes that the authority takes over from national supervisors the direct supervision of cross-border 'too big to fail' financial institutions and puts forward the idea of setting up a European guarantee fund which could be used to bail out banks in difficulty.

As for the markets authority, the draft report proposes that the authority be granted the right to prohibit the trading of certain products to protect investors and ensure stability.

European Systemic Risk Board

The rapporteur proposed a host of amendments which review the governance bodies of the ESRB, including their composition and most importantly a proposal is made for the president of the ECB to also be the president of the ESRB. The role of the EP is also increased by proposing that Parliament can conduct hearings of the ESRB's president and other members of the steering committee.
The report empowers the ESRB to issue a warning declaring the possibility of an emergency if it detects a risk which may destabilise the financial markets or the financial system in the European Union. It can also declare the existence of an emergency. When it issues these warnings it will transmit them through the Parliament and not only through the Council.

Finally it is proposed that the ESRB should be able to request information from undertakings not covered by the banking, markets or insurance supervisory systems.
Other reports discussed as part of the financial supervisory package were those dealing with the role of the ECB in the work of the ESRB, and a report dealing with the specific powers of the European micro-supervisory authorities. All reports are expected to be put to the vote in committee in May, with a plenary vote to follow in July.

Tuesday 23 February 23.02.2010

In the chair: Sharon Bowles (ALDE, UK)

Rapporteurs:

European Banking Authority
José Manuel García-Margallo Y Marfil (PPE, ES)

European Securities and Markets Authority
Sven Giegold (Verts/ALE, DE)

European Insurance and Occupational Pensions Authority
Peter Skinner (S&D, UK)

European Systemic Risk Board
Sylvie Goulard (ALDE, FR)

Specific tasks for the ECB in ESRB
Ramon Tremosa I Balcells (ALDE, ES)

Powers of the Micro-Authorities
Antolín Sánchez Presedo (S&D, ES)

Noticias

Publicado por Agence Europe (26 febrero 2010).

(EU) EP/FINANCIAL SERVICES: Christian Noyer opposes idea of an EU list of too-big-to-fails

At a public hearing on Thursday 25 February on financial supervision, organised by the European Parliament's special committee on the financial crisis, the governor of the Bank of France, Christian Noyer, opposed the idea of an EU list of “too-big-to-fail” financial institutions. He said that everyone wanted to reduce or remove moral risk but he had huge doubts about the drawing up of a list of too-big-to-fails as it could be counter-productive and increase moral risk by providing such institutions with a type of insurance policy. Too-big-to-fails are not necessarily the biggest institutions. Noyer said that the economic crisis had shown that many institutions that had to be bailed out would not have been on such a list.
In his draft report on the European supervision authority (ESA) that is soon to be set up for banking, José Manuel García-Margallo y Marfil (EPP, Spain) suggested that the banking ESA should have the power to supervise too-big-to-fail banks operating in more than one EU country, identified using criteria laid down by FSB and BRI (international organisations).

Noyer called for greater protection of savings in financial crises. At EU level, he called for “harmonisation” of the size of national savings guarantee funds and how they operate, in order to move towards a genuine EU savings guarantee system. Setting up an EU savings guarantee fund might be one option, as long as the banks provide the funding before any crisis occurs. Noyer gave the example of the French system that authorises the French authorities with power over the use of state funding to take decisions like sacking the managers and giving other institutions power over a failing bank. He said it would be appropriate for countries to levy a tax on banking to cover bailout costs.

In response to a question from Olle Schmidt (ALDE, Sweden) about whether the EU was running the risk of intervening too much, introducing too much legislation and going too far in its supervision of the banking system, Noyer agreed that it was necessary to strike the appropriate balance between essential measures and how they will impact on banks' ability to finance the real economy. He said that banks must not be allowed to wriggle out of new rules on the quality of capital, liquidity risk and “dynamic provisioning” but it was important not to kill off banks in attempts to “heal” them. Noyer, who used to be deputy ECB president, said the macroeconomic testing of recommended measures (tests that the Basel Committee will be carrying out later this year) will help calibrate the requirements to be levied on banks, but EU own funds rules for banks will not be applied until the Basel II rules, that are already in place in the EU, are applied by other parts of the world, like the United States. He made similar points about the well-needed reform of the EU financial supervision system, commenting that having inspection teams in a single location does not, in and of itself, ensure a better system (referring to the idea of ESA rapporteurs that the European Economic Risk Management Committee and the three ESAs (for banking, securities and insurance) should be located in the same city, namely Frankfurt in Germany). Noyer argued that the system recommended in the de Larosiere Report would be more effective in the Europe of today, namely keeping national supervisors and adding them to a federal system to encourage harmonisation of doctrine and legislation across Europe.

Noticias

Publicado en ABC (27 de febrero de 2010).

El presidente del Consejo

Cuando elaboramos el Tratado constitucional dedicamos muchas horas a debatir la conveniencia de crear o no una Presidencia permanente del Consejo europeo. Finalmente prevaleció la tesis de quienes defendíamos esa figura por razones de continuidad, visibilidad y eficacia. Pero como decía Edgard Faure, las instituciones son importantes pero de poco sirven si no se acierta con la designación de quien está al frente. La de Herman Van Rompuy como Presidente del Consejo europeo fue recibida con frialdad, algún medio lo tachó incluso de funcionario gris, olvidando que los funcionarios han sido esenciales en la formación y consolidación de los estados.

En este mes de febrero Van Rompuy se ha puesto a trabajar. Reaccionó con rapidez a la crisis económica convocando el 11 de febrero un Consejo informal que se saldó con un claro respaldo político a Grecia. Cambió los hábitos y celebró esta reunión en una biblioteca del centro de Bruselas desterrando a los ministros de asuntos exteriores, y en lugar de las habituales conclusiones de cincuenta páginas remitió a los presentes una sencilla carta con unas pocas ideas. El lenguaje de dicha carta era franco, directo, alejado de la incomprensible jerga comunitaria. El día 24 Van Rompuy se presentó ante el Parlamento Europeo. Utilizó varios idiomas con soltura, evitó el lenguaje corporal, rehuyó las frases grandilocuentes, no solemnizó las obviedades y dijo lo que tenía que decir en ocho minutos, sin divagaciones innecesarias. No buscó el aplauso fácil porque no es de los que dicen a cada audiencia lo que quiere escuchar ni afirma una cosa y la contraria en la misma frase. No le interesan los debates semánticos ni las vanas palabras que se lleva el viento, ese gran terrateniente, y «con voz lenta en gesto quieto» abogó por concentrarse en pocos temas y hacerlos bien. Demostró solvencia en las cuestiones institucionales, donde cuenta con la ayuda del siempre eficaz Richard Corbett. Tiene claro que en estos momentos los temas económicos tienen la prioridad y abrió una puerta a la esperanza en la trascendental regulación de la supervisión financiera europea donde José Manuel García-Margallo se esfuerza por unir visión y ambición con la complicidad de Antolín Sánchez Presedo en otra buena muestra de la colaboración PP-PSOE durante la Presidencia española.

Al día siguiente, en el Colegio de Europa de Brujas, el Presidente del Consejo europeo sintetizó el objetivo político de su Presidencia: el mantenimiento del modelo social europeo, la defensa de nuestros intereses y la proyección de nuestros valores. Mientras le escuchaba me acordé de aquellos que querían un Presidente del Consejo europeo que parara el tráfico en las calles de Pekín o Nueva York. Que quieren que les diga... yo prefiero a alguien que tenga la cabeza bien puesta sobre los hombros.

Artículo en Deutsche Bank Brussels Newsletter

Este es el artículo que me han publicado en Deutsche Bank Brussels Newsletter.

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.

Publicado en El Periódico.

1/3/2010 MEDIDAS PARA EVITAR UNA NUEVA CRISIS BANCARIA

La Eurocámara endurecerá la supervisión financiera de la UE
• Los diputados quieren más poder para la autoridad comunitaria europea
• Las enmiendas incluyen la creación de un fondo costeado por la banca privada



BRUSELAS
El Parlamento Europeo prepara un sustancial endurecimiento del proyecto de regulación europea de supervisión y control del sistema financiero. El objetivo es corregir las graves deficiencias del compromiso de mínimos pactado por los Veintisiete en el Consejo de Ministros de Economía y Finanzas en diciembre.

Las enmiendas presentadas por los grupos popular, socialista, liberal y verde coinciden en restringir al máximo el poder de veto casi ilimitado que tendría un estado sobre las decisiones de la autoridad europea de supervisión, según el compromiso de los Veintisiete. Las propuestas refuerzan también los poderes efectivos de las autoridades europeas de supervisión, con capacidad incluso para prohibir determinadas operaciones en los mercados y para imponer medidas directamente a una entidad si las autoridades nacionales no actúan con diligencia.

Otras de las propuestas innovadoras es la creación de un fondo europeo de garantía, financiado por las propias entidades, que serviría para garantizar los depósitos de los clientes y costear el rescate de bancos en crisis. Este fondo estaría autorizado a emitir deuda pública, costeada también por el conjunto del sector bancario, en el caso de que la crisis requiriera una ayuda superior a la disponible, según la propuesta del ponente del proyecto de regulación sobre la autoridad bancaria europea José Manuel García-Margallo (PP). El objetivo de la Eurocámara es evitar que los contribuyentes tengan que volver a pagar por los errores de la banca.

«La propuesta inicial de la Comisión Europea fue muy débil, sin seguir las recomendaciones de los expertos, y el acuerdo del Consejo de Ministros de la UE la descafeinó todavía más», comentó a este diario García-Margallo.

«Tenemos un mercado financiero abierto y común, mientras que la supervisión está fragmentada. La mera coordinación de los supervisores nacionales ya ha demostrado su ineficacia con la actual crisis, como ya había advertido el Parlamento Europeo desde el 2000», explicó García-Margallo. «Es imprescindible una auténtica supervisión a nivel europeo», subrayó. La alianza de los cuatro grupos parlamentarios garantiza un respaldo suficiente para forzar al Consejo de Ministros de la UE a negociar una regulación más estricta.

La Eurocámara quiere, en primer lugar, que la futura autoridad bancaria europea tenga un mayor protagonismo en la elaboración de las normas técnicas y obligar a la Comisión a tener que justificarse ante la institución y ante el Consejo de Ministros cuando no siga sus recomendaciones. Igualmente, la autoridad bancaria europea, según las propuestas de los eurodiputados, debe tener poder para denunciar públicamente a los supervisores nacionales que no sigan sus orientaciones y recomendaciones.