-In the wake of the recent financial scandals such as ENRON and WorldCom, MEPs adopted a resolution calling for a strengthening of controls and supervision of Europe’s financial markets. But Parliament wants to ensure that any new measures taken are targeted and proportionate and do not create any unnecessary red tape. At the same time, they should be co-ordinated across the EU and on an international level. Although at the present point in time, supervision is primarily a national responsibility, for the future, MEPs are looking to the creation of a single or several European supervisors and in the meantime adequate financial resources for national supervision. Parliament believes lax and complacent practices in some companies, especially in the United States, have considerably damaged investor confidence.
Furthermore, the absence of competition between auditors and rating agencies does not help the regulatory environment, while excessive bonuses and compensation schemes to financial executives has focussed attention on short-term profit and increased risks, thus contributing to volatility on the markets, MEPs believe. One suggestion to improve matters is to place full-time teams of independent supervisory specialists on-site at the largest European banks, insurance companies and financial conglomerates. Parliament is also urging Member States to set up special units of judges and prosecutors with expertise in financial market issues.
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