Supervision needs a European voice

27 May 2009 - “The reorganisation of financial supervision sought by the European Commission is a major step forward towards a European supervisory architecture,” said Manfred Weber, Chief Executive of the Association of German Banks.

The plans to strengthen the European committees of supervisors for the banking, insurance and securities sectors particularly in relation to national authorities were to be welcomed. But this should not be the end of the story. “Work on bridging the chasm between the present fragmented supervisory structure and politically desired as well as economically sensible EU financial market integration must continue,” Mr Weber added.

Ultimately, supervisory powers would have to be concentrated at EU level to oversee banks operating across borders. The Commission had already made a proposal to this effect in autumn last year.

The Association of German Banks welcomes the creation of a European Systemic Risk Council (ESRC) – proposed by the de Larosière Group back in February – which would identify risks to financial stability in Europe and issue recommendations for action to address such risks. Mr Weber said it was important that identifying and assessing risks was followed by clear-cut supervisory measures. “This is a must in a single European financial services market. We shouldn't stop simply at improving cooperation between national supervisors.”