Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-07-03-Speech-1-074"
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"en.20060703.14.1-074"2
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".
Mr President, in the few minutes I have this evening, I am going to follow current financial trends and consolidate my opening remarks in covering both Mr Muscat’s report and the oral question by Mrs Berès on behalf of the Committee on Economic and Monetary Affairs.
A third area calling for our attention is the one related to impediments to corporate reorganisation on a pan-European basis. We are currently consulting on future priorities for company law and corporate governance to identify how we could make further progress.
I would like to thank the rapporteur again for his work. We now have a shared analysis of what the main obstacles are. Our challenge for the coming years will be to remove them.
Turning to the oral question by Mrs Berès, let me be clear: the Commission believes strongly that market forces and shareholder choices should determine the optimal shape of exchange consolidation – not bureaucrats, not politicians. We should not be in the business of ‘picking winners’ or trying to shape markets according to a bureaucratic vision of what is best for European shareholders, investors and issuers.
In the long run, European investors and European corporations seeking to raise capital will be best served by world-class institutions doing business in a world-class regulatory framework deploying cutting-edge technology and able to provide the breadth and range of services they want. Those services might include the ability to trade in a multitude of currencies, time-zones and instruments. There are strong commercial pressures driving consolidation. If a deal makes commercial sense, and if the competition law and regulatory aspects can be adequately dealt with, then we will not stand in the way.
However – and this is the key point – the Commission considers that it is essential that financial market business in the jurisdiction of the European Union is regulated by European and Member State rules, and by our regulators. Of course we will be very vigilant to ensure that current levels of investor protection and market integrity will be maintained. We believe in strong and effective regulation of European marketplaces. Otherwise, we would not all have put so much effort into getting the MiFID right, as well as the other aspects of the Financial Services Action Plan that we have laboured on for so long together.
We note the preliminary assessment from some regulators in Europe and the United States that the mergers being discussed will not mean significant changes of regulatory responsibility. But if there are any spillovers, regulators should work out constructively together what the rules are going to be and how to cooperate.
I will be maintaining close contact with the college of Euronext supervisors in the time ahead so as to ensure there is a full understanding about how all these issues will evolve.
So there is no question of imposing new, extra-territorial burdens on European businesses that would put us at a disadvantage and jeopardise our internationally successful and developing financial markets. We know European users and shareholders do not favour that either.
On competition issues, the Commission’s competences in merger assessment are laid down in the EC Merger Regulation No 139/2004. Within this framework, it is up to the parties in the first instance to inform the Commission as to whether, in their view, the relevant turnover thresholds are met for Community competence. The New York Stock Exchange and Euronext have informed us that this transaction would not meet these thresholds.
On clearing and settlement issues, in the course of our work we have been trying to determine the best range of measures – legislative or not – that will deliver improved competitiveness in these areas. As regards the steps needed to deliver those benefits, the Commission has not yet taken a decision. All options remain on the table; a decision will probably be taken shortly.
As I emphasised during the hearing organised by the Committee on Economic and Monetary Affairs in January, the real debate cannot be on more or less cross-border consolidation. That is for the market players to decide, not the politicians. Rather, the core of the debate is on how to create the optimal regulatory and prudential framework for the European financial sector to thrive, delivering concrete and substantial benefits to the consumers and boosting economic growth and job creation.
That is why I would like to warmly congratulate the rapporteur, as well as the shadow rapporteurs, and members of the Committee on Economic and Monetary Affairs for their work. With such complex issues, it is not always easy to identify the real questions, to take into account all the different points of view and strike the right balance to set the way forward. Thanks to the rapporteur’s open, transparent and inclusive approach, the report does just that. It brings a substantial contribution to the debate.
I believe that there is a broad consensus on the main obstacles identified, shared by the Council conclusions adopted by the Ecofin Council in May.
We must improve the cost efficiency of the supervision of cross-border activities. In that respect, as noted in the report, further convergence of supervisory practices and standards is essential. To achieve this objective, we do not need a supervisory ‘big bang’, but rather to optimise the functioning of the Lamfalussy structure. There are concrete projects that can be implemented rather soon. The role of the Level 3 Committees is essential, for instance to implement common reporting standards and thus avoid costly and unnecessary duplicative requirements. A number of such concrete improvements have been identified and were endorsed by the Ecofin Council last May.
I would like to give a push to accelerating work in this area. We cannot have an internal market if companies are going to have to keep under-utilised capital tied up because we do not have in place sufficient cooperation between supervisors. I intend to come back to that in the time ahead. There is a regulatory and supervisory cost that should be evaluated.
The report rightly underlines the implications of increasing integration for supervision. Some complex questions, such as deposit guarantee schemes or the issue of lender of last resort, must be re-examined in that context. The Commission’s White Paper on financial services policy has identified those questions. This will surely be one of the most interesting policy debates for the coming months and years.
Besides supervision, the fragmentation of retail markets must also be addressed. The current difficulties in selling similar retail products in different countries is a major stumbling block in exploiting scale synergies.
I fully agree with the report that further integration, notably in the retail market segments, should not occur to the detriment of consumers. We have means to prevent that from happening and we will use them. The ongoing sectoral inquiries, under the supervision of my colleague Commissioner Kroes, are a good example."@en1
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