14 September 2005

September 2005

Graham Bishop’s Personal Overview. 


The EU is rapidly limbering up after its summer break, with several major issues bubbling – though some remain under the surface.

A potentially damaging power struggle between Parliament and Council continues to be hidden in the detail of the Capital Requirements Directive (CRD). The issue is how to give effect in the longer term to the real co-decision powers granted to the Parliament by Article 1-36 of the Constitutional Treaty now that the Treaty’s chances of coming into force seem modest. Even in its Press Release on the Hearing with CESR, ECON took the opportunity of re-stating its determination to maintain the details of the power-sharing agreement that brought the Lamfalussy Process into life.

Without some form of inter-institutional agreement, the CRD may have to go to a second reading, but even then the same problem will have to be resolved as most of the technical matters are done. So the CRD could face a lengthy delay unless the political issues are resolved.

Another political priority that is re-surfacing is the issue of convergence of regulation. The number of really pan-European financial groups may be small, but they are the giants and the drive to a single market is likely to enable them to increase their market share. So the supervision issue are only likely to get bigger. CESR’s consultation on mediation between regulators is welcome, but is likely to bring some of the underlying issues into the public gaze. In a similar vein, CEIOPS has highlighted the need for co-ordination between the Level 3 committees themselves.

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Graham Bishop

© Graham Bishop