08 October 2002

EMAC meeting 07-08 October

In a first exchange of views on the forthcoming report on clearing and settlement the rapporteur of the Economic and Monetary Affairs Committee Andria Generoso said that the main target will be the abolition of technical and legal hurdles.

To achieve this, there are two possible ways: either to stay as fragmented as nowadays or to establish a central agency of Trust and Clearing Cooperation like in the US. In this regard one may either - as a middle way - establish two or three agencies concentrating on efficiency or leave it to the market to organize this function by self regulation.

Whenever these functions will be executed by Banks or other private institutions it has to be clear that the functions have to be divided. The rapporteur therefore supports a non-commercial solution. Other MEPs also stated that Clearing and Settlement could also be seen as a task of common interest which underlines the non-commercial aspect.

In a short response the Commission stated that the consultation process is still under way. A final report expected in November. The main issues are to create a level playing field and not to accept any distortions of competition

The EMAC report is expected for 4 November

Basel II

Mr William McDonough, chairman of the Basle Committee on Banking Supervision, held a exchange of views with members of the EMAC Committee. Mr McDounough pointed out, that the new Accord spent special attention to the needs of small and medium-sized companies (SMEs), as well as to the specific problems of small financial institutions. 'Basically we are moving in the right direction', said Mr Radwan, rapporteur of the Economic and Monetary Affairs Committee on the forthcoming Capital Framework Directive.

Mr McDonough emphasised that his committee favoured special treatment for small loans or loans to companies with less than a certain level of sales so that the new rules did not constrain credit for SMEs. Moreover, the new framework should not favour big banks to the detriment of small ones.

He also stressed the importance of flexibility. 'We are trying to introduce as much flexibility as possible for the individual bank', he told MEPs. Afterwards it will be up to the European Union to decide how much flexibility to leave in the system. Then each national supervisory authority will be able to decide whether to accept that degree of flexibility or to be stricter.

Parliament is expected to adopt Mr Radwan's own-initiative report in early 2003.

Market Abuse

In approving Council's common position the Economic and Monetary Affairs Committee voted in favour of an amendment designed to safeguard the position of journalists when acting in a professional capacity. The amendment, relating to regulations designed to ensure the accurate dissemination of financial information, specifies that technical arrangements designed to ensure this should take into account self-regulation rules applying to journalists.

The common position is on the agenda for the November plenary session in Brussels.

© Graham Bishop