HM Treasury has published a speech given by Lord Myners, Financial Services Secretary to the Treasury to the EUROFI Financial Forum. EUROFI is a European financial services think tank.
Lord Myners praised the work carried out to date by the various European authorities and stressed the need for Europe to support the systemic risk board and the new European Supervisory Authorities.
Lord Myners then addressed four areas in which he believes further action is necessary:
Crisis management and resolution. Lord Myners proposed firm-specific contingency planning such as "de-risking plans" and the creation of "living wills".
- Deposit guarantee schemes. The financial crisis exposed weaknesses in the framework of deposit guarantee schemes that must be addressed. There needs to be secure access to additional liquidity support; the ability to finance the transfer of deposits to another institution; faster payouts; enhanced cooperation and a single point of contact for cross-border depositors.
- Supervision of cross-border bank branches. The general quality of supervision needs to be enhanced and there should also be effective safeguards for the hosts of branches. This could be achieved by strengthening the Capital Requirements Directive (CRD) so as to give regulators access to whole-group information.
- Central Counterparty (CCP) clearing. Lord Myners believes that there should be a Clearing Directive to bring the proven benefits of CCPs into a harmonised EU legislative framework.
Lord Myners concluded by welcoming EC President Barroso’s commitment to “smart regulation”. This would require consultation, cost benefit analyses and impact assessments to be done for all of the EU’s regulatory initiatives in order to create “effective, proportionate and comprehensive” regulation.
View EUROFI Financial Forum 2009: Check against delivery, 5 October 2009