Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-05-06-Speech-3-071"
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"en.20090506.3.3-071"2
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"Mr President, two weeks after our last debate on measures against the financial crisis, I welcome this opportunity to discuss with you further actions which were jointly taken to face this challenge.
The proposed amendments make adjustments to the Commission’s proposal on the way the envelope should be redistributed between beneficiaries. We are not fully satisfied with this. In particular we would have preferred that no amounts be redistributed from the European Financial Reporting Advisory Group (EFRAG) to the EU Committees of Supervisors.
EFRAG is a European body. It is an essential element of the EU’s influence in the standard-setting process of the International Accounting Standards Committee Foundation. Distributing amounts under the envelope from EFRAG to other European bodies does not send the right signal. However, we recognise that only a very limited amount will be redistributed from EFRAG to the EU Committees of Supervisors.
We also believe we can still achieve most of the objectives we are aiming at under the programme and for these reasons we can support the amendments. As Mr Hoppenstedt said, I am pleased to take this opportunity to announce that Coreper has adopted proposed amendments this morning and this means both the Council and the Commission can now support the Parliament proposal.
Moving to the review of the CRD, I am pleased to express the Commission’s general support for Parliament’s amendments. General support, but not full support, as the Commission still harbours some concerns on securitisation.
The proposal adopted by the Commission last October is the outcome of extensive consultation, a process that started before the financial crisis. In many aspects this review of the CRD has turned out to be a timely and robust first response to the crisis.
The European Parliament has commendably responded with a sense of urgency to adopt this proposal at first reading. As a result, we now have tighter liquidity risk management principles, strong rules on risk diversification, strengthened supervision, a better capital base, and skin in the game, coupled with due diligence requirements for securitisation. By any measure this is significant headway.
On the now famous 5% retention for securitisation, I am pleased to see that Parliament has resisted the call from industry to do away with what they had only last year characterised as complete nonsense. I would like to say that the retention rule has emerged as something that is not nonsense but plain common sense. It is now recognised by the G20 as a key measure to strengthen the financial system. Looking forward, the Commission will, without a shadow of a doubt, support any further efforts making the text even more watertight.
The Commission has been at the forefront of the global initiatives to tackle the crisis. The Basel Committee on Banking Supervision will follow suit. I therefore very much welcome the clause providing for a review by the end of 2009 suggested by the European Parliament. The Committee will consider the need for an increase of the retention requirement, taking into account international developments.
I am also pleased to see that Parliament has resisted the calls from industry for less stringent rules on interbank risks. Let us just remind ourselves that banks are not risk free. This is a crucial lesson of the financial crisis. Adequate diversification and collateral are critical to ensuring financial stability.
On own funds I understand the reluctance of some Members that Parliament could consider the downgrading of certain national instruments that do not meet the eligibility criteria for Core Tier 1. Let me be more precise. I understand this reluctance, but only for the current economic context. Much recovery is on track. The Commission is strongly committed to further enhancing the quality of own funds, as agreed at the G20 Summit.
Today I am particularly pleased to welcome the prospect of a first-reading agreement on two key measures: the Community programme to support specific activities in the field of financial services, financial reporting and auditing, and the review of the Capital Requirements Directive (CRD). They would both make an important contribution, not only to the recovery efforts, but crucially to the long-term effectiveness of financial supervision and the strength of the EU financial sector.
As regards securitisation, the Commission still considers that in some aspects there would have been merit in further clarifying and specifying the way the 5% retention will be calculated. I understand that the European Parliament has worked under time pressure and I am pleased that the Commission has been given a second chance to tighten up the text in a report due by the end of 2009.
The two reports on which you will vote today demonstrate that, when MEPs, Ministers of Finance and Commissioners think ahead of the curve and provide political leadership, a speedy and effective response to the challenges we face is possible. Both measures discussed today will significantly contribute to paving the way for the revision of the EU financial and supervisory framework.
In addition to these measures, last Wednesday we presented a package of crucial initiatives to respond to the financial crisis, on alternative investment funds, on remuneration structures and on packaged retail investment products.
Last but not least, in three weeks’ time a Commission communication will set out its views on follow-up actions to the recommendations of the de Larosière report on financial supervision. Upon endorsement by the June European Council, further legislative proposals will be presented in the autumn.
Firstly I would like to welcome Parliament’s amendments to the proposal for a Community programme to support specific activities in the field of financial services, financial reporting and auditing. The financial crisis has demonstrated the need to further strengthen EU supervisory arrangements. It has also reminded us of the importance of transparency and independence for bodies active in the field of financial reporting and auditing standards.
For the Commission, an essential move to achieve those aims is to reinforce the role of the key bodies in these fields, but at European and at international level. This is why the Commission proposed to provide them with financial support.
We believe there is a consensus that these bodies all need stable, diversified and adequate funding. When adopted, the programme will enable them to accomplish their mission in a more independent and more efficient manner. For the three committees of supervisors, the programme will be a first step in the strengthening of their capabilities in line with the recommendations set out in the de Larosière report.
It would give them the opportunity to develop projects which will enhance the convergence of supervision in Europe and the cooperation between national supervisors. In particular, exchange of information will be made easier by the setting-up of new IT tools. Common training for national supervisors will enable the emergence of a common supervisory culture.
The programme will also prepare the ground for the next steps of supervisory reforms, which the Commission will be dealing with in the coming weeks. We also need to ensure high quality for finance reporting and auditing rules, which are harmonised at international level. We need to make sure that there is a level playing field for European users and these rules are being developed by the standard-setters.
This is an important condition for creating a favourable business environment for firms, even more so in the current economic context. By avoiding the reliance of the International Accounting Standards Committee Foundation, the European Financial Reporting Advisory Group and the international Public Oversight Board on voluntary funding from non-diversified potentially interested parties, we can improve the quality and credibility of the standard-setting process.
By strengthening the European Financial Reporting Advisory Group we will provide stronger advice for the European Union when international financial reporting standards are being developed by the International Accounting Standards Board. By helping the international Public Oversight Board to increase its oversight capacities, we aim to ensure that the international auditing standards will fit the EU’s requirements for quality when applying them."@en1
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