EU unveils blueprint to overhaul policing of banks
The European Union unveiled its blueprint on Wednesday for an overhaul of the way banks and financial markets are policed, a central plank to new rules designed to prevent a repeat of the global economic crisis.india Updated: Sep 23, 2009 20:51 IST
The European Union unveiled its blueprint on Wednesday for an overhaul of the way banks and financial markets are policed, a central plank to new rules designed to prevent a repeat of the global economic crisis.
It plans to create a banking super-watchdog, with power to overrule countries such as Britain, and a pan-European supervisor that would warn of early signs of crisis.
“Our aim is to protect European taxpayers from a repeat of the dark days of autumn 2008, when governments had to pour billions of euros into the banks,” European Commission President Jose Manuel Barroso said in a statement.
“The European system can also inspire a global one and we will argue for that in Pittsburgh.”
The laws, which also include the creation of a separate supervisor for insurers and markets, are set to give more say than ever to European institutions as Brussels tightens its grip on an industry blamed by many for triggering the economic slump.
The blueprint, which is the result of an agreement reached by EU leaders earlier this year, could erode the authority of Britain, which is fighting to keep control over the centrepiece of its economy, the City of London.
“This package represents rapid and robust action by the Commission to remedy shortcomings in European financial supervision and will help prevent future financial crises,” Charlie McCreevy, the EU’s internal market commissioner, said.
Economic and Monetary Affairs Commissioner Joaquin Almunia said the new European Systemic Risk Board to warn of future crises and other watchdogs would solve weaknesses in the system that partly led to the financial crisis, which wrecked markets and froze lending.
The rules need the approval of the 27 EU governments and the European Parliament to take effect.