03 July 2008

McCreevy - further steps to counter financial turmoil

The Commission will propose a registration and external oversight regime for rating agencies. Also, supervision of cross-border financial groups must be considerably enhanced, McCreevy said and announced strengthening the role of the 3L3 Committees.

The Commission will propose a registration and external oversight regime for rating agencies. Also, supervision of cross-border financial groups must be considerably enhanced, McCreevy said and announced strengthening the role of the 3L3 Committees.

 

“I intend to propose, in October, a registration and external oversight regime for rating agencies, whereby European regulators will supervise the policies and procedures followed by the CRAs”, McCreevy said. Measures will include reforms to the corporate and internal governance of rating agencies, as well as measures to strengthen competition by encouraging entry into the market by new players.

 

With regard to the 3L3 Committees McCreevy wants them “to get closely involved in streamlining reporting requirements". To ensure adequate information exchange between supervisors and efficient cross-sectoral co-operation with other Level 3 Committees. To provide sharp and focused risk analysis and early warning in the event of threats to stability and to play a central role in coherent application of the rules, including mediation among supervisors.”

 

Changes to the Capital Requirements Directive will be proposed in early autumn and will require colleges of supervisors for all cross-border banking groups, he said.

 

Commenting on the consultation on the industries ‘Guidelines for Best Practices’ on disclosures of securitisation activities and risk exposures, McCreevy pointed out that it will be very important to verify the effectiveness of these initiatives. “The delivery of this work is a critical test for industry self-regulation”, the Commissioner said.

 

However, he also said that one has to be realistic about what regulators and supervisors can achieve and accept that now and then financial innovation may come at a cost.

 

Full speech

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