News

The European Commission on Wednesday issued a communication on “Driving European Recovery” outlining a major spectre of policy initiatives to be presented during 2009. The main issue to be addressed is the reforming of the European structure of supervision in the finance sector, and furthermore regulatory measures are proposed on a range of issues including Credit Rating Agencies and Hedge Funds.



In addition to the expected initiatives on supervision and regulation – which are broadly in line with the recommendation from the “de Larosière” Group issued last week – the suggested reform programme includes measures on responsible lending, aiming at improving confidence in financial institutions from consumers and enterprises. As a measure to increase prudent risk management in companies, a new Recommendation on remuneration in the financial services sector will furthermore be brought forward by the Commission already in April 2009.



Ensuring responsible lending is a key factor to stabilising financial markets and to ensuring a sustainable finance sector in future. It is of utmost importance that employees in the finance sector provide customers with clear information and prudent advice on the products they are selling. The use of sales targets and remuneration structures rewarding sales are counterproductive to this aim and increase the risk that products are being sold to customers who cannot afford it.



UNI Finance has put these points forward to the Commission at several occasions, and the good news is that they are now taking these concerns into account. This is a clear example of the importance of bringing experiences and information from employees to the knowledge of decision makers, regulators and supervisors in order for them to contribute to a proper risk management in companies.



The Commission organise a public hearing on responsible lending and borrowing in July 2009. Follow-up measures will subsequently be presented by autumn 2009.



The Commission communication with press release and annexes are attached this article.



See also related article on the 'de Larosière' recommendations.