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The Council approved policy and procedures for improving the EU's arrangements for financial supervision and financial stability. It set out steps to develop a European dimension into the mandates of national supervisory authorities, improved the functioning of EU committees of supervisors and the supervision of EU-wide financial groups.
The Council agreed on EU arrangements for financial stability and on future work on deposit guarantee schemes, and approved updated roadmaps for further work on the Lamfalussy process, the EU financial stability arrangements, and actions to be taken in response to the recent turbulence on financial markets.
The Council also adopted conclusions on mortgage credits and financial education.
Financial Services
ECOFIN Council agreed on further steps to develop the supervisory and financial stability arrangements in the EU.
The EU Supervisory Framework
- The Council endorsed the introduction of a European Dimension into the mandates of national supervisory authorities. Financial supervisors should intensify work towards enhanced European supervisory convergence within and across financial sectors. This would in particular allow financial supervisory authorities to consider financial stability concerns in other Member States and to apply guidelines and recommendations adopted by the 3L3 Committees in line with the 'comply or explain' procedure.
- The FSC is to present a report assessing the application of the EU dimension in the national mandates by the end of 2009.
Improving the Functioning of the EU Committees of Supervisors
- By 2008 the Commission is to revise its decisions on the establishment of the EU Committees of Supervisors to ensure coherence and consistency in their mandates.
- Specific tasks should be explicitly given to the 3L3 Committees to foster supervisory cooperation and convergence, and their role in assessing risks to financial stability. This could include mediation between supervisory authorities, facilitating information exchange, providing non-legally binding guidelines and recommendations, training and staff exchange, efficient cooperation across financial, and monitoring of financial stability and reporting on risks to the EFC.
- By September 2008 the Commission and the FSC will further examine the tasks and legal instruments of the 3L3 Committees. The FSC is invited provide guidance on this issue, as appropriate.
- The Council also recalls its request for the introduction of the possibility of qualified majority voting to be introduces by mid-2008.
- The 3L3 Committees are to provide a timetable to introduce EU-wide common reporting formats by mid-2008. The FSC and the Commission are to consider the next steps for convergence of regulatory and financial reporting in autumn 2008.
Supervision of EU-wide Financial Groups
- The Council in particular agrees that the role of the colleges of supervisors should be strengthened. Colleges should be extended to all cross-border financial groups and should operate along the same principles and objectives across financial groups (banking, insurance, conglomerates and investment services) and countries,
- Appropriate coordination tasks should be given to the home country supervisory authorities, while at the same time ensuring that all information that is relevant for the assessment of a financial group and its components, is made available to the host country authorities.
- In a financial crisis situation primacy will always be given to private sector solutions. If public resources must be involved, direct budgetary net costs will be shared among affected Member States on the basis of equitable and balanced criteria, which take into account the economic impact of the crisis in the countries affected and the framework of home and host countries’ supervisory powers.
Financial Stability and Crisis Management
- ECOFIN confirms that the MoU between Central Banks, Financial Supervisory Authorities, and Finance Ministries has been agreed and is in the process of being signed and will enter into force as soon as signed by all parties.
- The EFC is to initiate preparations for an EU-wide crisis simulation exercise to be organised in spring 2009.
Deposit Guarantee Schemes
- The EFC is to prepare an orientation discussion for the June 2008 ECOFIN meeting. The Commission is to present the results of its examination by early September 2008.
- FSC and EFC are to provide policy guidance on the way forward in view of preparing a strategic discussion by the ECOFIN in autumn 2008.
Next steps:
- Council stresses that, as a matter of priority, reinforced efforts are needed to finalise all actions by end-2008 and mid-2009.
- The ECOFIN Council shall review progress made in implementing the roadmaps on supervision and crisis management regularly, next time before the end of 2008. Overall progress and the need for further policy priorities shall be assessed by the end of 2009.
Council Conclusions - EU supervisory framework and financial stability arrangements
White Paper on Mortgage Credits
The Council supports the Commission's overarching goal of achieving competition and efficiency of EU mortgage credit markets and recognizes that further integration is likely to be supply driven rather than demand driven in the foreseeable future.
The Commission is asked to continue with different assessment studies and shall proceed with the proposed initiatives in accordance with the timetable put forward in the White Paper. The Council also welcomes the Commission's intention to design and to regularly update 'scoreboards' presenting objective information on the cost and duration of land registration and foreclosure procedures in all
Council Conclusions - Commission White Paper on the Integration of EU Mortgage Credit Markets
Further Issues:
Council Conclusions on financial education
Council Conclusions on Tax issues related to relevant agreements
Council Conclusions on the strategy for the evolution of the Customs Union
Council Conclusions on a Western Balkans Investment Framework