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“Supervisory powers differ strongly between Member States” the Commissioner stated, which causes additional regulatory burdens for financial institutions and leaves room for regulatory arbitrage particularly as the number of systemic cross-border financial institutions is increasing. “In my view, cooperation between Member States’ supervisors with a view to achieving convergence is the only efficient way to address this challenge” Mr McCreevy said.
As most efficient working tools for achieving supervisory convergence the Commissioner identifies “mediation mechanisms, common training and exchanges of personnel, exchange of information and expertise, setting up common reporting formats and one-stop shops for reporting, delegation of powers between supervisors and so on.”
Mr McCreevy also called for enhanced cross-sector cooperation between supervisors as financial services become more multi product and heterogeneous and stated that “there is a need to achieve better oversight and a more effective regulatory environment for financial conglomerates”.
The Commissioner also emphasised that financial integration and the tasks of regulation and supervision does not stop at the EU borders and legislators, regulators and supervisors have to keep up with this development.