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Barnier presented the following key principles:
Supervision
The new system started on the 1st of January 2011. It is composed of three European supervisory authorities: for banks (EBA), financial markets (ESMA) and insurance and occupational pensions (EIOPA).
These authorities will play a key role in preparing new common rules. They will ensure the proper application of European law. They will encourage cooperation between national supervisors. And they will settle possible disagreements between them.
The European Securities and Markets Authority has exclusive competence to regulate credit rating agencies.
More transparent financial sector
Transparency must apply to all financial institutions. This is the purpose of the Directive on alternative investment fund managers (AIFM), which imposes reporting obligations on financial actors like hedge funds.
Transparency must also concern all financial instruments and techniques, even the most sophisticated ones.
Financial stability
CRD IV will represent a significant cost for the banks. But the efforts will be spread over seven years (until 2019), and will be more than compensated by the benefits of a stronger banking system. The Basel Committee estimates the EU will gain between 0.3 and 2 GDP points per year. But CRD IV goes further. It also aims to create a Single Rulebook of financial regulation. It will be directly applicable in all Member States.