Barnier: EU and US are on the right track in regulating financial markets
11 May 2010
Speaking at the European Institute in Washington, Commissioner Barnier stressed that it is essential that both sides of the Atlantic reach the same objectives with banking capital reform, otherwise regulatory arbitrage will rule financial markets.
Speaking at the European Institute in Washington, Commissioner Barnier stressed that it is essential that both sides of the Atlantic reach the same objectives with the banking capital reform, otherwise regulatory arbitrage will rule financial markets.
He also said that international convergence is desirable – otherwise we risk distortions and regulatory arbitrage. Corporate governance must be strengthened too. Crisis prevention starts from within. Effective checks and balances within financial institutions would have helped mitigate the worst excesses.
On derivatives, he mentioned that the Commission is working very closely and very well with the CFTC. The discussions in the US are a bit ahead of the EU’s one and useful stimulation for Europe. He highlighted he is comforted that the US share the same objectives. The following key areas should be addressed:
· greater standardisation of contracts.
· trade repositories to capture all the information necessary.
· compulsory clearing via regulated Central Clearing Counterparties.
· ensure that all supervisors have access to this information, regardless of where they are in the world.
He concluded by saying that “the world needs a new, safer financial system. It can only come about if the EU and the US unite. And lead the way. If we implement broadly equivalent reforms. Yes, there are differences in our markets, such as banking. But we share the same regulatory objectives.”
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