Plenary debate on OTC derivatives – EP own initiative report in line with Commission’s ideas, Barnier said.
15 June 2010
Commissioner Barnier stressed that derivatives are useful financial products, but they could also be dangerous. He confirmed that the Commission intends to adopt a proposal on OTC derivatives at the beginning of September after having analyzed the consultation responses.
On 14 June evening a debate on OTC derivatives took place in the European Parliament in Strasbourg. Rapporteur Werner Langen (EPP/DE) stressed that OTC derivative markets need to ensure financial stability. He fully supports Commissioner Barnier’s initiatives and encouraged him to take action as soon as possible.
Kay Swinburne (ECR/UK) stressed that the regulation needs to find the right balance between speculative players and end users. She advocated for exempting end users from the scope of the regulation as well as from the Capital Requirements Directive. She disagreed with the ban of certain derivatives, as proposed in the Langen report.
Commissioner Barnier said the Langen report is in line with the Commission’s ideas on OTC markets and poses the right questions. Barnier stressed that derivatives are useful financial products, but they could also be dangerous. He confirmed that the Commission intends to adopt a proposal on OTC derivatives at the beginning of September after having analyzed the consultation responses.
He pointed out the following key issues to be considered in the legislation:
· Clearing houses on third countries
· Interoperability on CCPs
· Trade repositories
· ESMA will supervise CCPs and the trade repositories
· Volatility of commodities, control the excessive speculation on agricultural derivatives
· The EC is keen to deal with the dysfunctionalities of the derivatives markets
Concerning the ownership of CCPs, the Commission believes that the solution to possible conflict of interests is to put in place strong governance rules. Barnier concluded saying that there is a need to have more transparent and effective OTC markets.
The (non-binding) Langen report will be adopted today at noon.
Report prepared by Silvia Merino-Rueda of GrahamBishop.com
© European Parliament
