EU unveils moves for tougher financial supervision

EU unveils moves for tougher financial supervision

Brussels: The European Commission on Wednesday unveiled proposals for tough supervision of banks and financial markets, calling for new bodies designed to prevent a repetition of last year’s economic meltdown.

The EU announcement, on the eve of a summit of the Group of 20 leading world economies in Pittsburgh, Pennsylvania, included plans for new pan-European super watchdogs to oversee banks, insurers and securities firms.

The blueprint also foresees a new European Systemic Risk Board, constantly on the look out for financial faultlines which could provide an early warning system ahead of an impending 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," EU Commission chief Jose Manuel Barroso said.

“This European system can also inspire a global one and we will argue for that in Pittsburgh," he added.

The EU plans, to be approved by 27 EU governments and the European parliament, would also set up a European System of Financial Supervisors (ESFS), composed of national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.

Some nations, Britain in particular, have expressed concerns at handing such overarching powers to EU bodies which would be able to call for remedial action on a national basis.

Backing from Britain—Europe’s biggest financial centre—is vital if the new structures are to be up and running as planned by the end of next year.