Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-07-04-Speech-1-032-000"
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"en.20110704.19.1-032-000"2
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"− Mr President, I am now speaking about the aspects relating to economic and monetary affairs rather than legal affairs. There are two prongs to this legislation: first, clearing derivatives through central counter-parties. So there will not be the situation that prevailed after Lehman went down, where it took a long time to sort out who owed who what, although it is worth pointing out that matters were, by and large, sorted out. The second aspect is reporting of all derivatives to a central registry. So, in future, there will be a much better understanding of the level and ownership of derivative contracts, and an alert will be given if it seems there is a build-up of systemic risks.
The comparison with US legislation has and will be taken seriously in order to avoid regulatory arbitrage. Equivalence, not sameness, is the key, as we are not the US and there are important differences between our legislative processes and theirs. For instance, the powers of rule-making devolved to ESMA cannot be as wide as for their US counterparts, and conduct of business aspects in the EU belong to MiFID and MAD.
I support exemption of foreign exchange from clearing, since there are already settlement procedures through CLS Bank that cover the risk. I also support the exemption of pension funds from the clearing obligations. This should continue until the collateral problem has been solved. Here we do have a difference from the US in that their CCPs accept a wider range of collateral so that their pension funds are not caught in the expensive cycle of asset conversion that would apply under EMIR.
We also hear a lot about horizontal versus vertical silos. What is important to my group is open access and the efficiency that competition provides. We need to ensure that there is not unfair profiteering, because the costs incurred in the financial system in general take their toll on the real economy and real people."@en1
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