-At the first ECOFIN working session, the EU Ministers for Economic and Financial Affairs, the Commission, the
ECB President and NCB Governors agreed that a fully integrated financial markets would act as a catalyst for economic growth across all sectors of the economy, boost productivity, and provide lower cost and better quality financial product for consumers, and enterprises, in particular SMEs.
Accelerated integration of financial markets should be market-led, facilitated by action by policy-makers to remove legal, regulatory, tax and other administrative obstacles to financial integration.
Therefore Economic and Finance Ministers agreed to:
Step up efforts to complete the Financial Services Action Plan (FSAP) by 2005, including the adoption of this year of 8 important legal measures as stated in the Conclusions of the Barcelona European Council. Furthermore, they agreed that individual measures should meet the objectives of integration and efficiency.
Promote consistent implementation and enforcement of regulation. They invited the Commission, involving relevant supervisory authorities and Ministries of Finance, to suggest appropriate arrangements to facilitate this process by September 2002. Further convergence of supervisory practices is also necessary, and the industry should be engaged in the process of improving the implementation of regulation in the EU.
Enable effective competition. They urged the Commission to apply strictly competition policy rules to financial markets, including cross-border M&As, and be fully prepared to respond to the evolving structure of the EU’s financial markets as integration proceeds.
Enhance consumer confidence and provide consumer protection, including increased information for consumers about available mechanism across the EU for protecting their interests, harmonization of rules essential for consumer protection, and consultation with consumer organizations in the early stage of design of relevant FSAP legislation.
(See Economic and Financial Committee (EFC) Asset Management
http://www.efama.org/',WIDTH, 300, SHADOW, true, FADEIN, 300, FADEOUT, 300, STICKY, 1,DURATION,3500)" onmouseout="UnTip()");">EFC Report.pdf' target='_blank'>Report on Financial Integration)
At the meeting the Ministers also have examined the policy issues related to the financial collapse of Enron and welcomed a paper prepared by the Commission on the EU response to the relevant policy issues in five key areas.
The EU’s High-Level Group of Company Law Experts has been asked to examine the implications of the Enron case for Europe. The High-Level Group is due to present its proposals for reform at the Seville European Council. This report will be formalised for approval in September.
Ministers, the Commission, the ECB President and NCB Governors agreed that the collapse of Enron raised a number of international policy issues of major significance for the integrity of financial markets. They noted, however, that most of the key regulatory issues highlighted by the case are already being tackled by present EU initiatives, notably in the context of the Financial Services Action Plan.
In particular, they emphasised that early adoption of the EU Regulation on International Accounting Standards is of particular importance, along with strong enforcement, so that International Accounting Standards will enter into force throughout the EU. They also encouraged the International Accounting Standards Board (IASB) to work as a priority on the most sensitive accounting issues raised by recent events.
They also looked forward to the issuance of the Commission's Recommendation on auditor independence which should avoid any conflict of interest for auditors and thus ensure their independence and a new Communication on the priorities for the EU future auditing strategy later this year which will cover issues including auditing standards, public oversight and audit Committees.
The Committee of European Securities Regulators (CESR) will be asked to report on the financial market issues involved in relation to complex derivatives and hedge funds. The Commission will also assess the roles of financial analysts and credit rating agencies and possible measures to improve their participation in the market. The Commission will involve all EU sectoral supervisory committees, where relevant, on the follow-up to the Enron collapse.
Ministers also agreed, in line with the Commission's report and in response to the conclusions of the Barcelona European Council, to extend the mandate, and, if needed, the composition, of the High Level Group of Company Law Experts to review further issues related to best practices in corporate governance and auditing practices with the aim of analysing their preliminary conclusions at the June ECOFIN meeting. The final conclusions will be presented in the September informal ECOFIN meeting.
See also FT article EU to weigh financial stability rules
© Graham Bishop
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