The European Commission has published a speech by Charlie McCreevy (Commissioner for the Internal Market and Services) entitled Financial Markets & Economic Recovery - Restoring confidence and responding to public concerns.
In his speech Mr McCreevy states that there is an increasing gap between the EU supervisory structure, which is primarily organised on a national basis, and market developments, where integration and internationalisation lead to complex interdependencies.
The Larosière Group was set up to make recommendations on how to strengthen the European supervisory framework. The recommendations from the Larosière Group will be incorporated in a Commission Communication which is expected to be published in March 2009.
Mr McCreevy briefly discusses some of the measures that the Commission has been working on. This includes revisions to the Capital Requirements Directive (CRD), the regulation of credit rating agencies, amendments to accounting rules and initiatives on executive pay, credit derivatives, and accounting. The Commission is also reviewing the existing regulatory framework surrounding hedge funds and private equity.
Mr McCreevy stresses that the current proposed amendments to the CRD are only the beginning of a far more comprehensive review of the entire Basel 2 Accord.
On hedge funds the European Commission has launched a public consultation on certain key issues such as the impact of hedge fund activity on the stability of the financial system and the degree of transparency towards regulators, investors and counterparties. The results – along with the results of a separate assessment of the effectiveness of self-regulatory codes in the private equity industry - will be discussed at a high-level conference in Brussels in February. On the basis of the responses to this consultation, the Commission will prepare appropriate regulatory initiatives.