EU Council supports Commission and de Larosière on supervision
The ECOFIN Council - the council constellation gathering finance ministers from all EU member states - agreed at their meeting on 9 June a set of conclusions supporting the framework on future supervision outlined in the Commission communication of 27 May.
However, disagreement on certain points was reflected in the conclusions, also refecting the ongoing debate in the medias since the de Larosière report came out in late February and intensifying as the de Larosière proposal has gained political support and started to take shape.
It is essentially the UK who has been reluctant to certain parts of the proposal. The country is not part of the Eurozone and has been reluctant towards the close relationship between the European Central Bank and the suggested European Systemic Risk Board, ESRB. The suggestion that the three new European System of Financial Supervisors should have binding mediating powers in case of disagreement between host and home supervisors has also not been welcomed by the UK as they have also not liked the idea that the European Supervisory Authorities should have supervisory power over European wide institutions such as credit rating agencies.
The question regarding the European Central Bank was settled in the conclusions of the ECOFIN council meeting, but disagreements were reflected on the other issues. However, the conclusions from the European Council meeting 18-19 June, which supported the Commission communication and the ECOFIN conclusions, complemented by stating that there should be binding mediation and that European Supervisory Authorities should supervise credit rating agencies.
With this it seems the first attempts to water down the current proposal have been avoided. However, the UK finance industry does not cease to complain and has apparently increased their lobbying budget 500 pct. to counterwork the promised reforms of the regulatory framework of the sector.
The conclusions from the two meetings are enclosed this article as well as an article from the FT on the UK finance industry and their fear of weak UK lobbying on the reforms. See also UNI response to the FT article in 'related articles'.