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“The reports we are receiving concerning credit markets are worrying”, Commissioner Almunia said in a conference held in Brussels. “We are hearing widespread reports of businesses being denied access to bank credit”. The Commissioner reported specific problems in financing large scale infra-structure projects and for financing international trade.
“Repairing credit and market channels is therefore an urgent priority”, Almunia said, and several Member States are exploring the idea of creating a 'bad bank' to buy up the toxic assets. “Before rushing into the 'bad bank' debate we have to co-ordinate at EU level our views on first, what are the 'bad assets' that we need to deal with, second, what is the best way to value them, and only then to address the issue of what is the best way to manage them”, the Commissioner warned.
Almunia also underlined that the 'laissez faire' approach to regulation that has characterised the financial sector over the last 20 years can no longer be tolerated. “We must design a new system, one based on transparency, rigorous supervision, and vigilant risk management”, he said.
Almunia also underlined as an ‘urgent priority’ to finally tackle the issue of cross-border supervision in Europe. “After years of piece meal advances, we can no longer push this issue to the side”, he said. “I am hoping for ambitious proposals that – within the limits of the Treaty - will set out concrete actions to strengthen European supervisory arrangements”, he said. “There is now a real necessity to have a single supervisory agency at EU level.”