BRUSSELS (MNI) – Sweeping changes to Europe’s financial supervision
regime were given final approval on Wednesday as members of the European
Parliament voted for the legislation at a meeting in Strasbourg.

European Parliament President Jerzy Buzek said the package was
adopted with a “significant majority.”

The approval paves the way for three new micro-prudential European
supervisors to start on January 1, 2011 and for the establishment of a
macro-prudential European Systemic Risk Board to be chaired for the
first five years by the President of the European Central Bank.

“Having fought for more than a year in favour of a radical reform
of European financial supervision, the European Parliament on Wednesday
gave the final seal of approval to a package of reforms which will see a
fundamental shift in the way banks, stock markets and insurance
companies are policed as of 2011,” the Parliament said in a statement.

Of the three new micro-prudential supervisors, there will be one to
monitor insurers, one for banks and one for markets.

The deal was finalised in September after intense negotiations over
certain points that the UK delegation saw as an infringement on its
national sovereignty.

Compromise was reached after it was agreed that a national
government could veto decisions taken by the new EU regulators if they
thought the ruling would impact their national budgets.

“The day-to-day supervision remains in the hands of the national
supervisors,” Belgian finance minister Didier Reynders told members of
the European Parliament shortly before the vote. He said the new
regulators would be “coordinating with national supervisors, not
replacing them.”

The European Commissioner for Internal Markets, Michel Barnier,
said his division of the Commission would continue to propose new
regulations until every player in the financial sphere was intelligently
regulated.

“We will build together, and not too late, the best global
regulation and supervision system,” Barnier said, just ahead of the
vote.

Sharon Bowles, UK member of European Parliament for South East
England and Chair of the Parliament’s Economic and Monetary Affairs
Committee, expressed her displeasure at some of the compromises that had
been made in the negotiations.

Bowles said the EU regulation system was “still like a Swiss
cheese, with holes.”

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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