Today, the U.K. Treasury Committee published a report entitled The Committee’s Opinion on Proposals for European Financial Supervision at the request of the House of Commons European Scrutiny Committee. The "urgent" request for the Opinion came as a result of the European Commission's (EC) publication two months ago of European financial services regulatory reform proposals potentially set to be adopted at the upcoming December 2 Economic and Financial Affairs Council (ECOFIN) meeting. While the Treasury Committee "welcomed" the "intention" of the new regulations, the Treasury Committee noted they could have "profound effects" and there is a "great deal of unease" about the "detail" of the proposals. In particular, the Treasury Committee found "serious cause for concern" regarding:
- the "speed" with which it is hoped ECOFIN will agree to the new proposals;
- how these proposals relate to global initiatives for regulatory reform;
- the size and composition of the proposed European Systemic Risk Board;
- the extent to which it is "desirable or possible to delegate discretionary powers" to the proposed European Supervisory Authorities (ESA), including "unease about the potential power they will have to override the decisions of national regulators";
- the EC having unilateral power to declare an emergency, which will give ESAs further power to direct national regulators; and
- the legislative proposals "not appear[ing] to give due weight to ECOFIN’s conclusion this past June which stressed that the measures 'should not impinge on the fiscal responsibilities of the Member States.'"
Treasury Committee Chairman John McFall stated that "The financial industry should not take our concern about these proposals as a tacit license to return to business as usual," rather it is important to get effective financial regulation and supervision "right than rush it through."