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Eurofi published a set of seven reports that were communicated to the de Larosiere Group summarising the proposals for restoring confidence in the financial system, further strengthening financial supervision and regulation in Europe, and enabling the European financial services markets to operate more securely in light of the experience of the present financial crises.
To restore confidence in the banking market eurofi proposed a strictly common specific asset naming system and a highly consistent global valuation practice.
Eurofi also calls for the integration of supervision at European level for financial companies operating cross border as other decision-making mechanisms present various disadvantages.
For each cross-border financial institution, a network-based approach calls for specific colleges to be set up, made up of supervisors with a common and country-neutral mandate, eurofi proposes.
With regard to a system in charge of macro-prudential supervision in Europe, eurofi proposes that each country should set up an organisation that is in charge of national macro-prudential supervision, while the 3L3 Committees should have increased powers to define corrective measures.
It calls for a transformation of the European committees, by giving them powers to harmonise rules and practices, arbitrate on disagreements in terms of risks or competition issues, and work at European level to assess the impacts of the colleges’ prudential decisions in terms of competition. These committees should be provided with the powers and resources required.
A new European Macro-Prudential Supervision Institution composed of the European Commission, CEBS, CEIOPS, CESR, the members of the ESCB and a representative from each EU member state would validate the action plans and recommendations.
Further recommendations:
Investment Products and Policy
Ø Long-term investor activities should be clearly differentiated from other shorter term banking and financial activities
Ø Long-term investor activities should be regulated and supervised by a dedicated regulatory and supervisory framework
Ø Clarifying responsibilities along the fund value chain and launching a harmonization effort across Europe
Ø Further harmonizing regulation for the most common non-UCITS funds and for comparable investment products
Securities Infrastructures:
Ø EU authorities should favour a more systematic implementation of clearing processes and possibly Central Counterparties (CCPs) in order to reduce the risks of on-exchange and OTC markets.
Ø A regulatory level playing field should be maintained between stock exchanges and alternative trading venues
Reports:
2. Long-term investment: the urgent need to recognise the specific features of this class of assets
3. The need and ways to improve macro-prudential supervision
4. Banking regulations must also factor in the growing role of micro-credit
5. Improving banking and insurance supervision at EU level through a EU network of supervisors
7. Proposals for improving confidence within the banking system