Strengthening the supervision of financial markets to avoid new crises

S&D Euro MPs will back new measures to strengthen the supervision of financial markets in a vote next Monday in the European Parliament’s economic committee.

Said S&D group spokesman Udo Bullmann: “We want the EU to have the tools for anticipating and managing new systemic crises as witnessed with the collapse of Lehman Brothers. Regulation and supervision are two sides of the same coin.

Said Peter Skinner and Antolin Sanchez Presedo, the two S&D Euro MP leading the negotiations: “We need strong and independent supervisory authorities and a system in which financial supervisors work hand-in-hand both at national and European level. It will be built on the work of three existing European sectoral committees and involve the creation of a European Systemic Risk Board.

“As a new watchdog for all sectors of financial markets, the ESRB should have the power to assess the risk of a systemic crisis and contagious effect.

“It should include independent experts and fewer central bankers and should be chaired by the president of the European Central Bank.

“The European supervisory authorities should also have supervisory powers over financial institutions. They should be able to settle disagreements among supervisors through binding decisions. This is crucial if we are serious about supervision.”

The S&D group also supports a European bank deposit guarantee fund to protect depositors across the EU and a stability fund financed according to systemic risk to ensure the full internalisation of costs caused by future bank and financial market crises.

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