Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-06-14-Speech-1-201"
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"en.20100614.25.1-201"2
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Madam President, honourable Members, first let me express my thanks to Mr Langen for this report, and to the Committee on Economic and Monetary Affairs. This is a timely report that is of a high quality and that is economically and politically important. Mr Langen has asked all the right questions – which, knowing him as I do, does not surprise me – and has adopted and proposed an ambitious point of view. I believe that this is indeed the right approach to this issue, given its financial and economic importance.
I have also noted your preference for clearing houses and central repositories to be located in Europe. Personally, Mr Langen, I am in favour of such an approach. That is why we presented three different options with regard to trade repositories in our consultation.
However, if these facilities are to be located partly in Europe and partly elsewhere, the challenge is to ensure that all these entities are indeed subject to the same rules and that our competent authorities have direct, immediate and unconditional access to the information they need.
The report also expresses a preference for giving the European Securities and Markets Authority (ESMA) a powerful role in authorising the supervision of clearing houses and in registering and monitoring trade repositories. This is also a very important issue on which we must continue to work. Mr Langen, responsibility in the areas of supervision and authorisation is linked to tax liability.
Granting supervisory responsibility to ESMA would mean that, in theory, ESMA would also assume budgetary responsibility, which is difficult to envisage at this stage, but we have not yet taken a final decision on this point.
I also share your concerns about the volatility of the commodity derivatives markets; I am currently working on that very issue of volatility and, as I told Parliament, on controlling all risks of speculation and hyper-speculation, controlling what I consider to be scandalous transactions in the area of agricultural commodities. Here too we must strive for general transparency in these markets and establish tools to combat their excessive volatility.
Finally, the Commission wants to find a solution to the problems observed recently in the derivatives markets, particularly in respect of sovereign debt. Ladies and gentlemen, today I also began a consultation on short selling, which also covers sovereign credit default swaps (CDS). We will also present a legislative proposal in September.
For these reasons, I sincerely believe and am happy to tell you personally that the Langen report demonstrates the necessary level of commitment to these extremely serious issues in order to help define and implement a strategy for the OTC derivatives market, so that it may become more secure, more transparent and more efficient. Moreover, in many respects, this report represents for our governments and for the Commission a very useful and very important incentive, and for that I thank you.
Honourable Members, you are all aware that, when discussing the derivatives market, we are talking about a market worth USD 600 trillion, and about products that are used daily by banks, but also by businesses, to cover potential fluctuations in exchange rates and interest rates, or volatility of oil prices.
As Mrs Swinburne said, these products are useful to our economies but, at the same time, they can be a source of risk and currently fall outside any form of transparency or registration. That is what we need to change and what you, Mr Langen, propose in your report. It is also the approach that the Commission announced in its communication on the derivatives markets in October 2009, and which I personally confirmed to Parliament on 13 January 2010, as you may remember. This proves, Mr Langen, that I intend, as I said on 13 January, to be in the driving seat and not in the passenger seat.
Precisely with that aim in mind, I would like to confirm my intention to submit a legislative proposal on over-the-counter (OTC) derivatives this summer – at the beginning of September to be precise. The objectives are clear: we want to increase transparency, establish a general standardisation process, and strengthen the markets.
However, we must also do all of this swiftly, effectively, and without improvising. Parliament’s assessment is on the table; my services have been working for several months and have maintained a constant dialogue with all the parties involved. In fact today we launched a public consultation to finalise our proposals on some specific aspects. I would like to mention, for example, the criteria that must be adopted in order to make derivatives clearing mandatory; not all derivatives can be standardised.
Secondly, the type and level of prudential risk management requirements, which we have to have with regard to clearing houses; Mrs Băsescu rightly raised this issue. These clearing houses should enable us to reduce systemic risks, and we must be very careful to ensure that they can succeed by establishing all the conditions they require to perform that role.
Thirdly, the conditions under which clearing houses in third countries can offer these services in Europe. Another issue is the potential interoperability between clearing houses and the issue of trade repositories; these are key infrastructures, since they will compile all information on transactions. How should we regulate them? Should we demand that they be established in the European Union? These are all questions to which we will pay close attention, and we should be mindful of the answers that we will be given. We will also take into account the results of this consultation in our impact assessment and in the legislative proposal.
I should like to highlight a few more specific points from the Langen report. Firstly, I have taken note of Parliament’s concerns over the ownership of clearing houses and the risk of excessive control of these clearing houses on the part of their users. I, like you, Mr Langen, want to be aware of any potential conflicts of interest but, at the same time, we must consider the fundamental European Union rules in the area of freedom of investment, and these rules do not sit well with the regulation of clearing house ownership. However, we will continue to work on this issue.
This is a sensitive matter and one that I do not wish to avoid; I raised this question in consultation and, in any event, we need strict governance mechanisms in order to minimise any potential conflicts of interest."@en1
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