The Belgian Presidency will pay attention to the coherence and cumulative effect of these various reforms. Crisis prevention and resolution tools will also be on the agenda and must be improved, in particular those intended to deal with systematically-failing institutions and cross-border problems
Financial sector reforms
Under the Belgian Presidency, the Council intends to consolidate financial integration, create a new architecture for supervision of the financial sector, improve stability of the financial system and increase consumer and investor protection. The Belgian Presidency will draft a multi-annual action plan, in cooperation with the Commission and the European Parliament, determining all financial service reforms to be introduced within the European Union, in particular taking account of projects and work-in-progress within the G20.
The creation of a new supervisory structure at European Union level by the end of the year, in accordance with the conclusions of the “Larosière” committee, will be of crucial importance. At macro-prudential level, the European Systemic Risk
Board must detect and identify systematic risks for financial stability. At microprudential level, European Supervisory Authorities will, in cooperation with national supervisory authorities, implement the European financial supervision system, and should work towards the finalisation of a single rule book and encourage convergence in supervisory practices. They will seek to do this whilst guaranteeing more effective application of Community law, better management of systemic cross-border risks and a faster rate of response in the event of a crisis.
Based on discussions in cooperation with Parliament and the Commission, the Presidency will ensure that these new institutions are fully operational by the beginning of 2011.
Crisis prevention and resolution tools must be improved, in particular those intended to deal with systematically-failing institutions and cross-border problems.
In view of the financial sector's responsibility for the crisis, the Council will seek appropriate contributions from the financial sector to be channelled into crisis management and prevention mechanisms and to protect savers from failing financial institutions.
In order to improve the resilience and stability of financial institutions in the event of a crisis, it is important to set requirements in terms of capital and liquid assets at the most appropriate levels, in compliance with directives resulting from work undertaken at international level, particularly by the Basel Committee and the Financial Stability Board. The Belgian Presidency will pay due attention to the coherence and cumulative effect of these various reforms.
Based on the Commission’s proposals, the Council will examine legislative initiatives relating to:
- promoting greater security of derivatives markets, by increasing transparency and reducing counterparty risk, in particular by central counterparty clearing for standardized derivative products;
- short selling and Credit default swaps;
- continuing reform of European legislation on deposit guarantee schemes and investor protection in order to increase consumer protection by applying the
Council's decision to increase the level of deposit guarantees to €100,000 and ensure greater effectiveness of the directive on deposit guarantees;
- reinforcing the internal market through initiatives such as revision of the directive on financial conglomerates or setting a deadline date for the completion of migration to a Single Euro Payments Area (SEPA).
. Investment Fund Managers (AIFM directive) which aims to regulate hedge funds and private equity firms in accordance with G20 commitments. Based on the European Commission’s proposal, the Council will entrust the supervision of credit rating agencies to the European Securities Markets Authority.
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