Commissioner Almunia pointed out that the pace of progress in financial integration is too slow and remains very far from the goal of a single European financial market. “Cross-border inter-dependencies have increased as the EU financial sector becomes more integrated” the Commissioner said. “It is essential, therefore, that our work on improving EU supervision keeps pace with the changing economic and financial environment”, he added.
“The growing complexity of the European financial markets is suggesting to some that there are risks for their stability”, the Commissioner said. “It is essential, therefore, to avoid the mistake of viewing the necessary reform of EU supervisory arrangements as a uniquely institutional matter” he continued.
“We should start thinking about new supervisory arrangements, based on a careful examination of liquidity arrangements of banks, including in terms of emergency assistance and lender of last resort facilities, consistency of the bankruptcy and winding-up proceedings, and current deposit guarantee regulations” the Commissioner said.
“However successful we are in improving EU supervision, we cannot exclude the possibility of a future pan-EU financial crisis. So, the issue of burden sharing needs to be put firmly on our agenda. Of course, this is a highly political question, on which we need to proceed with utmost care”.
Full speech
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