EU sets up trio of financial watchdogs

Three new pan-European watchdogs are to oversee the financial services sector under a compromise deal struck by ministers in Brussels on Wednesday.

A breakthrough came after several hours of negotiations, with European Union finance ministers agreeing complex voting and appeals procedures should any country feel the new authorities were overstepping their brief and intruding on areas of national sovereignty.

Britain had been anxious to protect the City of London’s dominant role in financial services and was reluctant to cede oversight to Europe. However, envoys said they were satisfied with the protections secured.

Nevertheless, the creation of the three watchdogs – to be based in Paris, London and Frankfurt and to cover securities, banking and insurance markets respectively – is a significant step towards more centralised, pan-European oversight of the sector and is likely to be viewed warily in the City.

One London lawyer said: “Yet another compromise on so-called red lines about fiscal safeguards simply is not the answer . . . We should not agree to . . . more Europe until there is a fundamental change in the way regulatory policy is made and deployed by the EU,” said the lawyer at CMS Cameron McKenna, a large City firm.

The watchdogs have been set up under a radical overhaul of the EU’s patchy system of financial supervision after last year’s financial crisis. This also involves establishing a European Systemic Risk Board, comprised mainly of the region’s central bankers, which will monitor risks to the 27-country bloc, although that did not form part of the finance ministers’ agenda.


The three new European supervisory authorities will not handle day-to-day supervision of individual financial institutions, a role that will remain with national watchdogs. But they will have the task of co-ordinating the actions of national supervisors, have direct supervisory powers over credit rating agencies, and work towards a “common rulebook” for all EU financial institutions.

http://www.ft.com/cms/s/0/905b3dce-df66-11de-98ca-00144feab49a.html

Another bunch of useless bureaucrats paid by EU tax payers. Get rid of them !