UK Lords criticise EC proposals for regulation
The House of Lords EU Committee has welcomed moves to improve the regulation and to strengthen the supervision of financial institutions and markets in the EU. But it criticised the European Commission for their failure to follow their own "Better Regulation Principles" in its latest proposals to regulate hedge funds.

Fuente:  Fecha: 17.06.2009

The Committee's Report, "The future of EU financial regulation and supervision" also warned that there are some real difficulties with Commission proposals for reform of EU supervisory bodies. The Committee was concerned that the UK Government had not set out their own thinking to influence the debate on these reforms.

The Committee welcomed steps agreed in recent months at EU level to improve the regulation of financial services by revising the capital requirements of institutions, increasing deposit guarantees across the EU and regulating credit rating agencies. It recommended that the Commission work towards an overt counter-cyclical capital regime through further amendments to the Capital Requirements Directive in conjunction with changes to the Basel rules.

But the Committee were critical of the speed and manner with which the Commission have brought forward their latest proposals on regulating alternative fund managers. Rapid action must not come at the expense of thorough consultation, impact assessment and risk analysis by the Commission in line with their own Better Regulation Principles, said the Committee. They warned that EU regulations must not stifle European participation in global financial markets.

The Committee supported moves to set up a macro-prudential supervision body for financial services and markets in the EU. However, it recognised that the role of the ECB in such a body is a difficult issue given that the ECB is the Central Bank for the Eurozone but not for the whole EU. The Committee said that the Government's thinking on role, powers and structure of this body appeared less than fully developed and urged the Government to remedy this if it is to influence final decisions in the coming months.