Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-02-11-Speech-3-144"
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"en.20040211.6.3-144"2
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".
The Commission welcomes this debate and broadly supports the content of various draft resolutions tabled by Parliament. Whilst the facts are not yet fully clear, the Parmalat case is deeply worrying. It is the latest in a growing list of major financial scandals of various types – in various places – over the last few years.
The apparent size of this fraud is staggering, and the apparent complicity of a number of people from distinguished, liberal professions together with the failures of regulatory control are equally staggering. Scandal upon scandal will cumulatively weaken financial markets like the corrosive drip of a leaking fuel tank. Many sensible investors will pull out. Economic growth will be affected because the cost of capital will rise – the Enron affair has already shown that. So this matters to all of us.
My first point is this: the financial services industry had better get its act together, and do so quickly. We need some real industry leadership to stand up and take charge, to clear out the crooks, expose their unscrupulous practices and curb excessive greed. If industry leaders are not prepared to do this, then regulators will have to do much more than perhaps they or we would like. If that is the result, then industry leaders cannot winge about regulation from Brussels. They will have brought it upon themselves. Industry leadership is lacking at the moment, quite frankly.
Secondly – we already have a range of policies in hand which will go some way to improving matters in the future: measures in the Financial Services Action Plan – such as the Market Abuse and Prospectus Directives – which should be rapidly implemented; measures such as the new Investment Services Directive, which will help deal with some of the major conflicts of interest in the investment services business; the new international accounting rules which will enhance disclosure, along with the Transparency Directive – which we want adopted before this Parliament breaks for its elections. All these directives also enhance the powers of competent authorities to act and also to cooperate much more across borders. In my view, that means cooperating as well, in the same way, with foreign regulators – non-European regulators – in particular the SEC in Washington and also the Public Company Accounting Oversight Board in the United States. Capital markets today – as we all know – are global and regulatory cooperation must be global too to match them.
Thirdly, in March I shall propose to my colleagues in the Commission a revised Company Law Directive on the statutory audit function. It will strengthen controls over the audit profession in the European Union with independent oversight; strengthened inspection; stronger ethical and educational principles and high quality audit standards. These four aspects will be contained in the revised Company Law Directive.
As a result of Parmalat, the revision of the eighth Company Law Directive is likely also to include the following four elements: first, full group auditor responsibility for consolidated accounts of a group of companies; second, obligatory independent audit committees for listed companies – all 7 000 of them in Europe; thirdly, stricter auditor rotation requirements; and fourthly, strengthened sanctions.
I am accelerating work in three other areas in the Corporate Governance or Company Law areas in order to have proposals ready, if possible, later this year. They are the following three areas: the role of non-executive directors; directors' responsibility for company accounts; full disclosure in the company accounts of offshore special purpose vehicles, including the reason why the company uses those offshore structures and a much stricter verification by the group auditor of their content. We are also working hard on the issues of conflicts of interest of financial analysts and looking again at credit rating agencies. The Katiforis report is of considerable help in that regard.
Finally, the role and regulatory control of offshore centres need to be tightened. We are considering the options, although that is not easy. We expect to table in June the third Money Laundering Directive and we expect it to play a significant role.
To conclude, this is a very important debate. We support the main lines of this resolution. We are working, resolutely, in that sense. We still wish for strong industry leadership and an appropriate dose of ethics."@en1
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