Ecofin Council
© BDI / adpic
10/22/2010
EU financial supervision is intended to avoid the development of crises and to allow more rapid action in emergency cases. Altogether there will be three supervisory authorities: for banks
(EBA), insurance and occupational pensions (EIOPA) and stock markets (ESMA). Furthermore, there will be a “risk council” reporting to the European Central Bank which will keep a constant eye on the entire European financial system for risks and make recommendations to supervisors. As in the past, day-to-day supervision work will remain in the hands of national authorities. In periods of crisis, the EU supervisors will have the power to give direct instructions to financial institutions and markets. In addition, they will be able to ban risky financial products. The agreement is the result of long and difficult negotiations with the European Parliament.
The new “European semester” aims to strengthen EU-wide coordination of national budgets and economic policies. In future, member states will have to inform the other member states and the European Commission about their budget plans early each year. Under the new procedure, European heads of state and government will set the strategic direction of economic policy every March. EU countries will then present their medium-term strategy and their national plans for economic reforms in April. In June and July, EU governments will submit recommendations. Only then will the budget for the subsequent year be voted on in the national parliament.
There is wide consensus among the member states on the need to introduce a European bank levy. However, it is still unclear where the revenues would go. Whereas several member states hold the view that they should flow into a restructuring fund, others such as Great Britain and France argue that the money should be used to reduce deficits. The European Commission has announced draft legislation for October 2010.
There is disagreement among the member states on the introduction of a financial transaction tax. While Germany, France and Austria have spoken in favour, Great Britain and Sweden have taken a critical stance, worrying that this measure would weaken London and Stockholm as financial centres. The two countries fear that business will emigrate to New York. The Commission has announced that it will make proposals to prevent such emigration. The Commission’s first proposals in this area are expected in October 2010.
Finance ministers agree on common EU financial supervision
© BDI / adpic
EU ministers meeting in the Ecofin Council in September 2010 agreed on three new European financial supervision bodies.
The authorities are due to start work on 1 January 2011.EU financial supervision is intended to avoid the development of crises and to allow more rapid action in emergency cases. Altogether there will be three supervisory authorities: for banks
(EBA), insurance and occupational pensions (EIOPA) and stock markets (ESMA). Furthermore, there will be a “risk council” reporting to the European Central Bank which will keep a constant eye on the entire European financial system for risks and make recommendations to supervisors. As in the past, day-to-day supervision work will remain in the hands of national authorities. In periods of crisis, the EU supervisors will have the power to give direct instructions to financial institutions and markets. In addition, they will be able to ban risky financial products. The agreement is the result of long and difficult negotiations with the European Parliament.
The new “European semester” aims to strengthen EU-wide coordination of national budgets and economic policies. In future, member states will have to inform the other member states and the European Commission about their budget plans early each year. Under the new procedure, European heads of state and government will set the strategic direction of economic policy every March. EU countries will then present their medium-term strategy and their national plans for economic reforms in April. In June and July, EU governments will submit recommendations. Only then will the budget for the subsequent year be voted on in the national parliament.
There is wide consensus among the member states on the need to introduce a European bank levy. However, it is still unclear where the revenues would go. Whereas several member states hold the view that they should flow into a restructuring fund, others such as Great Britain and France argue that the money should be used to reduce deficits. The European Commission has announced draft legislation for October 2010.
There is disagreement among the member states on the introduction of a financial transaction tax. While Germany, France and Austria have spoken in favour, Great Britain and Sweden have taken a critical stance, worrying that this measure would weaken London and Stockholm as financial centres. The two countries fear that business will emigrate to New York. The Commission has announced that it will make proposals to prevent such emigration. The Commission’s first proposals in this area are expected in October 2010.
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