The European Commission has published a speech by Charlie McCreevy (European Commissioner for Internal Market and Services) entitled The current global economic crisis.  

In his speech Commissioner McCreevy (CM) discusses those areas of the financial crisis that causes him the most concern. CM states that his primary concern is with the “state of the global financial sector and in particular the impact on it of the negative feedback loops that are now evident in the real economy.”  

He adds that it “is inconceivable that the recent scale of the falls in output, of the rises in unemployment, and of the collapse in global trade will not have a serious negative impact on what one might call banks’ real economy customers - and therefore on the extent of the banks next round of bad debts. In turn the impact of that on banks’ capital bases and therefore on their ability to finance economic recovery - without further government injections and support - must be a real concern for policy makers and supervisors everywhere.”  

CM states that to fully repair the financial sector is a herculean but urgent task that requires “removing remaining strains in funding markets, repairing bank balance sheets in a way that is credible and durable, restoring cross-border capital flows, and limiting the unintended side effects of the policies being implemented to combat the crisis.”  

Near the end of his speech CM discusses whether the financial crisis was due to a lack of regulation. He states that much of the regulation is already there but that it simply wasn’t enforced. He argues that this is “why supervisory structures and supervisory resources and expertise must be and will be strengthened.”  

View EC speech -The current global economic crisis, 8 May 2009