Evidence suggests that the total expected benefits of the financial regulation agenda will outweigh the expected costs, both on a rule-by-rule basis and when considering the reforms as a whole. Many rules create considerable positive synergies, e.g. between the capital requirements package in banking and the reform of derivatives markets. The financial system is already changing and improving. This change will continue as the reforms take effect.
President José Manuel Barroso said: "The financial services industry is one of Europe’s greatest assets, and we want it to prosper so that it can lend to citizens and businesses and so help the recovery in the wider economy. But European taxpayers have forked out huge amounts to prevent a financial collapse, and they rightly ask two things in return: that the sector plays its role fairly, and that future banking crises never again become sovereign crises. This is about fairness. That is why the Commission took immediate action in 2008 to create a more responsible financial sector. Since then we have presented over 40 laws to curb bankers' bonuses, boost the amount of cash banks hold in reserve, cast more light on hedge funds, ratings agencies, central counterparties and complex trading and improve consumer protection. We have introduced common rules to ensure that shareholders and other investors – not taxpayers – are first to pay the bill when a bank fails. We have proposed a financial transactions tax to ensure that financial operators pay their fair share into the public purse. And we have created a Banking Union – a single supervisor and a common fund, paid for by banks – for the euro area and other countries that want to join. Thanks to our proposals being adopted into law in record time, European financial markets are now safer, more transparent, and banks are managing their risks more responsibly."
Internal Market and Services Commissioner Michel Barnier said: "The European Commission has worked tirelessly for more than four years with the European Parliament and the Council of Ministers to implement our roadmap for a fundamental overhaul of the financial sector, based largely on G20 commitments. We always tried to find solutions that reduce risks to financial stability and consumers while, at the same time, allowing the financial sector to ensure a sustainable flow of finance to the economy in order to support growth and investment. Most rules are now adopted, so it is time to do a first assessment of their overall impact, their costs and benefits, and how they interact. It shows that there are many positive synergies between rules which complement and reinforce each other. Benefits also outweigh the costs for every individual measure. Taken as a whole, this review demonstrates that we have delivered what we set out to do: the financial regulation agenda is making the financial system more stable and responsible, working for the benefit of the economy and citizens across the EU."
Today's package includes a Commission Communication "A reformed financial sector for Europe" accompanied by a detailed economic review explaining how the reforms reshape the financial sector and the resulting benefits. The Communication recalls the objectives that guided the Commission, presents an overview of the reforms it proposed, and takes stock of the key effects that can already be observed today.
Full press release
Communication "A reformed financial sector for Europe"
FAQ
Economic Review of the Financial Regulation Agenda
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