The Committee on Economic and Monetary Affairs adopted the own-initiative report by Burkhard BALZ (EPP, DE) on stocktaking and challenges of the EU Financial Services Regulation: impact and the way forward towards a more efficient and effective EU framework for Financial Regulation and a Capital Markets Union (CMU).
Against the background of the 2007-2008 financial crisis, an ambitious reform agenda for the EU financial sector has been launched to strengthen financial regulation and supervision. While the outlook for growth in Europe has improved, the transposition and implementation of the financial regulatory reform is still ongoing and not yet completed.
Stocktaking and challenges for the current framework: Members stressed that an efficient and effective financial services framework ensuring financial stability is a prerequisite for increasing (long-term) investment and fostering growth in a competitive European economy. Whilst recognising the achievements of financial regulation in responding to the ramifications of the financial crisis, Members noted concerns about the increased complexity, reflected in the greater amount, detail and number of layers of regulation and supervision with requirements at international, European and national level. Members also stressed the need for a holistic view of EU financial services regulation in which the CMU contributes to complementing banking financing.
To that end, the Commission should work closely with the ESRB, ESAs and National Competent Authorities to resolve any mismatches in approach that could risk undermining the objectives of the CMU.
Members stated that effective and efficient EU financial services regulation should be coherent, consistent (also on a cross-sectoral basis), proportionate, non-duplicative and free of superfluous complexity and prevent legal uncertainty, regulatory arbitrage and high transaction costs.
This stocktaking exercise should contribute to building better functioning financial markets serving the financing needs of the real economy, including by addressing loopholes, gaps, inconsistencies, incoherence and disproportionality, and should not undermine the legislative achievements obtained so far, bearing in mind the requests made in review clauses as adopted in each specific legislative act, and without anticipating results should not be seen as an exercise leading to deregulation.
Members stressed the need to break the link between sovereigns and banks at national level through full and consistent national implementation of the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism (SRM) and Single Resolution Fund (SRF) provisions.
The report called for the promotion of additional rating providers with a view to increasing competition in a highly concentrated market. It recalled that the Commission is due to publish a report on the appropriateness and feasibility of supporting a European Public Rating Agency for sovereign debt and/or a European credit rating foundation for all other credit ratings by the end of 2016.
Underling the importance of the international framework with respect to its scope, methodologies and implications for the EU framework, the Member States, the Council, the Commission and ESAs are called upon to streamline the EU position, with a view to increasing its influence and promoting the legislation it has adopted through a democratic process. The need to achieve consistency of new regulation, both with the European acquis and with international guidance, and proportionate implementation, including in scope, is stressed in order to avoid unnecessary divergences and duplication in legislation.
Better EU financial services regulation: Members stated that better financial regulation implies a robust framework and starts with Member States applying the current acquis. The Commission is called on for regular reports to Parliament on the state of transposition and implementation of the legislation, and where applicable, the infringement proceedings brought against Member States.
Member States are urged to:
ESAs and SSM: Members stated that the ESAs and SSM have a crucial role to play in achieving the objectives of better regulation and supervision. They have to be adequately funded and staffed if they are to fulfil the tasks given to them by the co-legislators.
Members called on the Commission and ESAs to regularly publish consolidated versions of EU financial services regulations on their websites, including a summary which can be accessed and understood by businesses, consumers, civil society organisations and others. They stressed that the creation of a common register that includes references to national implementation would be an option worth exploring.
The way forward: lastly, Members called on the Commission and the ESAs to:
The Commission is called upon to: