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Addressing the ECON Committee in Strasbourg, Commissioner McCreevy said that a regulatory approach is necessary for the clearing of Credit Default Swaps following the missing industry initiative. “The response of the industry has been disappointing”, he said, underlining that there is no time to wait any longer. “I welcome proposals to address the issue of clearing of Credit Default Swaps on a European CCP, pending a more complete review of the whole derivative area”
“CESR and the ECB both consider that clearing of CDS on a CCP in the EU is essential for financial stability and oversight”, he said and called on the European parliament to support an amendment in the Capital Requirements Directive to give effect to this.
He also strongly opposed to any carve-out of all short term inter-bank exposures from any prudential rules as this will jeopardise the stability of the financial system, he said. “Member States don't want this. Supervisors have warned against it. And I urge you to be against it”, he told MEPs.
Supporting the increase of the securitization retention requirement to 10% or 20%, the Commissioner also warned against “any attempt to exclude vaguely described types of securisation from the requirements”. “The well paid City lawyers must not find a way round it”, he said.
On Solvency II McCreevy also calls for early adoption. “Some of you would like to make the entry into force of the CRAs or CRD contingent on wider regulatory or supervisory changes such as a legally binding mediation mechanism, or a European system of supervisors”, he said. “Of course, if supervisory integration moves forward, post de Larosière, we will have to modify certain arrangements”, he explained.
McCreevy announced a White Paper on crisis management to be published in summer which sets out a policy framework for effective crisis intervention. “We have tried to work through colleges of supervisors for the larger cross frontier financial institutions”, he said. “But this has not found favour with Member States. We cannot go on and leave things as they are.”