In a joint report with other associations from the financial services sector, Businesseurope concludes that comprehensive impact assessments on the new financial regulation must be carried out to address the cumulative and/or systemic impact of different pieces of regulation.
Businesseurope together with the European Banking Federation (EBF), the European Federation for Retirement Provision (EFRP), the European Private Equity and Venture Capital Association (EVCA) and the Federation of European Accountants (FEE) present their ideas for effective financial reform in order to reinforce financial stability and achieve sustainable economic growth.
The report concludes that rebuilding trust in financial institutions and restoring investor confidence in financial markets is key for a sustained economic recovery and for the competitiveness of the European Economy. The gaps in the existing regulatory and supervisory framework should be identified and resolved at both European and global level. The goal must be to establish a sustainable basis for financial markets and the economy as a whole, avoiding overregulation and preserving a favourable climate for financial innovation. The stability of the financial system and the steady growth of the economy depend on an adequate regulatory and supervisory framework.
Financial reforms should not have a disproportionate impact on growth. Smart regulation must ensure that the right solutions are found and that policies are effective and proportionate in their scope and nature. Comprehensive impact assessments must be carried out which address the cumulative and/or systemic impact of different pieces of regulation, not only on the financial sector but on the economy as a whole. They should be carried out urgently in order not to delay the adoption of much needed reform measures.
The debt crisis in the euro area is threatening a fragile recovery. A relapse into economic recession will be very costly in terms of higher unemployment and more severe budgetary problems. To contain the debt crisis there is a continuing need for coordinated responses that are credible to financial markets. Prudential regimes and supervisory actions should be sufficiently counter-cyclical to prevent an aggravation of the crisis. Member States should start consolidating government budget sooner rather than later. Europe’s business and financial industry can contribute to achieving sound public finances, while maintaining adequate provision of health care, long-term care and pensions to our citizens.
The current circumstances call for great caution, as well as great leadership and determination to act. Today’s crises are global in nature whether they affect the financial sector, the States or the environment. These increased interdependencies make uncoordinated unilateral communications and actions counterproductive and potentially detrimental to all, especially in the current climate of extreme volatility. All governments, all market players and all citizens have a common interest and that can only be met through cooperation.
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