ECON committee: Financial system in the spotlight as MEPs quized Barnier
04 May 2010
In a wide-ranging debate, the Commissioner covered crisis prevention and CRAs amongst others. Mr Barnier avoided commenting on the Goldman Sachs case, because of legal proceedings in the US, but added that the Commission would be looking at how to deal with CDS and naked short selling in October
Barnier reiterated that during 2010 the EU has to deliver on the G20 Commitments. On CRAs, he mentioned that the EC has to check if the current legislation is enough to bring transparency and responsibility in the CRAs’ sector and in case it isn’t then the EC will look for further solutions.
He presented the following future proposals for 2010:
· Clear regulation on derivatives. Barnier mentioned the possibility of exemptions for final users but always making sure that they do not pose systemic risks.
· To control short selling, to come up with a model so as to avoid the situation where each member state has a different tool to react and it damages the whole internal market.
· CRD IV, make banks more solid, increasing resilience of banks,
· Improve the availability to intervene cross border financial institutions, to prevent crisis, harmonized national resolution tools.
· Prevention system should be based on the polluter approach, where the polluter is the one who pays and not the taxpayers. Next month the EC will publish a communication on a possible resolution fund.
· Corporate governance, banks and insurance companies need to return to a healthy remuneration system. The EC will publish a green paper to enhance corporate governance in the financial sector by the end of May.
Jose Manual García-Margallo y Marfil (EPP/ES) asked Commissioner Barnier whether the EC is thinking on banning CDS or not taking into account what has happened in Greece. Mr Barnier said the EC is carefully looking at it and it will be tackled through the derivatives legislation. However, more than a banned on CDS there is an urgent need to tackle the reliability of the member states’ national statistics service.
Jean Paul Gauzés (EPP/FR), pointed out that the EC should published the impact of the CRAs legislation to see if it has been efficient or not.
Wolf Klinz (ALDE/DE) highlighted that it is not so clear that the resolution fund will have the necessary volume to pay for a possible future crisis.
Arlene McCarthy (S&D/UK) called on the Commissioner to urge the US to accelerate their implementation of CRD so as not to create regulatory arbitrage.Mr Barnier responded that the dialogue with the US has to be confident but not naïf, as the EU needs to know what the counterparty is doing moreover that 80% of the financial transactions are between US and EU.
