Less regulation welcome

BRUSSELS – European Union member states and banks signaled support yesterday for the European Commission’s decision to think twice before introducing more financial regulation, but said there was still unfinished business to be completed. The industry is absorbing some 40 measures to create a single financial market in the 25-nation European Union as outlined in the financial services action plan (FSAP). In a policy consultation document from the Brussels executive released earlier this year, the Commission said it was not going to propose another slew of rules but will focus on implementing the action plan and address a few specific new issues such as the retail market. At a hearing to discuss the document yesterday, industry and government representatives supported the move. “There is no overwhelming support for a new major legislative program, for an FSAP 2, among member states,” said Peter Nyberg, deputy chairman of the Financial Services Committee, part of the Ecofin EU financial ministers group. «The Council (of member states) is strongly in favor of shifting the focus to implementation,» Nyberg said. And Jose Maria Roldan, chairman of the Committee of European Banking Supervisors, which groups watchdogs from the EU’s 25 member states, agreed. «When I talk to my banks, they are a little bit fed up with all our hectic work of the last few years,» Roldan said. «This regulatory pause is a way to be able to digest all the regulatory food we have taken. This was needed,» Roldan said. Nyberg said there was much support for simplifying existing EU legislation and that any new measures must be based on evidence that they are needed and of real benefit. «There is a lot of unfinished business we needed to get done. We are very far from a legislative pause,» Nyberg said. Several speakers said it was important to ensure that measures adopted so far are enforced in the same way across the EU. European Central Bank President Jean-Claude Trichet said he favored new rules for Europe’s fragmented trade clearing and settlement industry, the bedrock of the financial market. «An efficient securities clearing and settlement infrastructure is of fundamental importance to the integration and efficiency of the internal market,» he said. But Trichet doused debate on whether there should be a system of supervision for large banks that gives the main role to the home market watchdog, leaving supervisors of countries where the bank has branches with only a supporting role. This is referred to as a lead or consolidated supervisor, but Trichet said cooperation between watchdogs is best. «The most intimate cooperation between national supervisors is absolutely of the essence now. It is also true that what the industry puts behind the concept ‘lead supervisor’ goes very far and is not really, really workable,» he said. Meanwhile, the Commission was urged to be more vigilant. «The Commission needs to be more proactive in sniffing out anti-competitive practices,» said Nigel Wicks, deputy chairman of international settlement house Euroclear.

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