MEPs on the Economic and Monetary Affairs Committee yesterday made significant changes to the European Commission's proposed financial supervision framework. The Committee's proposals will require the approval of the European Parliament and further debate and lobbying is inevitable. In a press release published yesterday - see here - the Committee's decisions were explained:The EU's financial supervisory plans were beefed up by Economic and Monetary Affairs Committee MEPs on Monday, with new measures including a much bigger say for the nascent European Systemic Risk Board before and during crises affecting financial stability, direct EU supervision of systemically important financial institutions, the right to impose temporary bans on very risky financial products and the designation of two EU stability-assisting funds.
EU supervision must be much stronger than what the Commission and Council are proposing, in order to prevent the kind of slow and fragmented supervisory responses seen in the 2007-2008 crisis, said the committee, broadly backing the position of its rapporteurs.
If backed by Parliament as a whole, the committee vote will base all the proposed supervisory bodies in Frankfurt and make them part of a tightly-integrated system, replacing the looser network of supervisors in various European cities originally proposed.
Intensive talks now start between MEPs and the Council find a deal that satisfies both sides. It is hoped that this deal could then be put to a vote at Parliament's June plenary session. If the deal is done in June, then the bodies provided for in this package can be set up in 2011".
The Committee was due to vote on the proposed Alternative Investment Fund Managers Directive but this will now take place on May 17 so that time is available to consider the opinion of the Legal Affairs Committee (available here, pdf).
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