EU Parl approves new supervisory architecture
Wednesday 22 September 2010 - by Nicola York
The European Parliament has today given the green light to a package of reforms which will see a overhaul of the way banks, stock markets and insurance companies are overseen from 2011.
The new ESAs will get tough new powers to settle disputes among national financial supervisors and will be able to impose temporary bans on risky financial products and activities.
If national supervisors fail to act, then the authorities may also impose decisions directly on financial institutions, such as banks, so as to remedy breaches of EU law.
ESAs will also have the power to investigate specific types of financial institutions, products or activities such as naked short-selling, to assess their risks.
European Conservatives and Reformists group economics spokesman Dr Kay Swinburne MEP says: "This deal ensures that cross-border markets can be supervised by cross-border institutions who coordinate the work of national regulators. It provides the markets with a common rule book and greater certainty over the key questions of who will regulate what and where.
"Instead of handing over the keys to the City of London, this deal places it in a kind of European Neighbourhood Watch programme. Peer oversight will provide us all with loudhailer warnings when there are macro systemic or particular risks.
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