On March 10, the European Commission launched a consultation Driving European Recovery on major structural changes to European financial services and markets regulation. The Commission intends by the end of May to publish a communication setting out its proposals on the future of the EU supervisory architecture followed by numerous specific legislative measures before autumn 2009. At this stage, it is seeking the views of interested parties. The Commission requests the submission of comments by April 10.  

The Commission endorses the key principles set out in the recent de Larosière Report and calls for a supervisory system combining stronger oversight at the EU level with maintaining a key role for national supervisors. Its proposals here contrast with the de Larosière recommendations, which focused on EU level supervision.  

The Commission will propose an ambitious new reform program, designed to deliver “responsible and reliable financial markets for the future”. The reform program will have five key objectives:  

  1. To provide the EU with a supervisory framework that detects potential risks early, deals with them effectively before they have an impact, and meets the challenge of complex international financial markets. The Commission will present a European financial supervision package before the end of May 2009.
  2. To fill gaps where European or national regulation is insufficient or incomplete, based on a ‘safety first’ approach. In particular, the Commission will propose:
  • A comprehensive legislative instrument establishing regulatory and supervisory standards for hedge funds, private equity and other systemically important market players (April 2009)
  • A white paper on tools for early intervention to prevent a crisis (June 2009)  
  • On the basis of a report on derivatives and other complex structured products (June 2009), appropriate initiatives to increase transparency and ensure financial stability  
  • Legislative proposals to increase the quality and quantity of prudential capital for trading book activities and tackle complex securitization (June 2009) and to address liquidity risk and excessive leverage (Autumn 2009)  

There will also be proposals:  

  1. To ensure that European investors, consumers and small and medium-sized enterprises can be confident about their savings, access to credit and their rights as concerns financial products.
  2. To improve risk management in financial firms and align pay incentives with sustainable performance.  
  3. To ensure more effective sanctions against market wrongdoing.  

The de Larosière Report can be found at:  


Driving European Recovery can be found at:



More information on the consultation is available at: