Two such groups have already operated this century – and both have had profound consequences. The group chaired by Alexander Lamfalussy solved the problem of a legislative logjam in financial regulation necessary to implement the single market. It created a four-level process of delegation from primary legislation that the European Parliament skilfully parlayed into complete co-decision with Council – a historic change in the democratic structure of Europe. The second group was chaired by Jacques de Larosière and it developed the Lamfalussy Process into a set of European Supervisory Authorities (ESAs) that moved collective power significantly to the European level. So “Liikanen” has a high target to match.
Who are the members? Liikanen himself is the Governor of Finland’s central bank, a two-time Commissioner, a former finance minister and guided Finland into the EU. Of the nine members, three are professors and another two have been; two are/were central bank governors; three are/were bank CEOs/senior executives; two former civil servants, one industrialist, one regulator and one consumer champion. But one of the bankers chairs the Dutch co-operative bank Rabobank that is deeply rooted in agriculture and sustainability and was the last European bank to be rated AAA. So the membership contains the expertise to take a wider look at banking – set amidst its social functions.
The mandate is wide: consider whether there is need for structural reforms – and make any proposals as necessary to establish “a safe, stable and efficient banking system serving the needs of citizens, the EU economy and the internal market”. They are to “have regard to” reform underway in the EU and globally so that means considering Volcker/Vickers/Dodd-Frank i.e. separation of roles limitations on functions and size. Any proposals should pay particular attention to reducing the risk of the banking system as a whole, reduce the risks of individual firms, reduce moral hazard by making “exit” a viable option for the largest and most complex firms, promote competition and maintain the integrity of the single market.
Full article (FW subscription required)
© Financial World
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article