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The recent financial market corrections do not provide any convincing evidence for the setting up of a new authority for EU supervision, ECB President Trichet said in a speech before the European Parliament. However, it is of crucial importance to further exploit the potential of the Lamfalussy framework, he added.
To prevent future crises supervisors should make further efforts to reinforce cooperation and exchange of information on a cross-border basis, he said underlining the need to further enhance cooperation between central banks and supervisors “which could entail the use of supervisory information to enrich financial stability assessments, and the translation of such assessments into tangible supervisory action”.
One of the main issue that emerged during the recent turmoil concerns the ‘need for a smooth flow of information between central banks and supervisors’, he underlined. “Central banks may need supervisory information for the effective performance of their functions in the management of a crisis, such as money market interventions, provision of Emergency Liquidity Assistance, and financial stability monitoring”, he said and supported the envisaged reinforcement of the EU legal basis for information exchange between central banks and supervisors.