Financial Regulatory Forum

FACTBOX-EU to improve protection of financial consumers

July 12 (Reuters) – The European Union’s executive put forward proposals on Monday to bolster consumer confidence through better and faster protection of investors who face a run on their bank or have been the victim of fraud.

The European Commission’s plans are part of wider efforts to learn from the financial crisis, in which the savings of millions of people were hit by extreme market volatility and some banks had to be rescued by taxpayers.

The Commission has proposed toughening EU rules that protect bank account holders and retail investors. It has opened a public consultation on improving how insurance policy holders are safeguarded.

The 27 EU states and the European Parliament have the final say on the proposals, which seek to encourage investors to save for their retirement and avoid taxpayers having to bail out banks again in any future crisis.


* Under EU rules dating to 1994, all states must set up national deposit guarantee schemes to reimburse account holders up to a certain level if their bank runs into trouble.

BREAKINGVIEWS – Compromise in sight on EU hedge funds directive

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Pierre Briançon

PARIS, April 14 (Reuters Breakingviews) – When does regulation become protectionism? This is what European Commissioner Michel Barnier has to decide as he attempts to broker a compromise between the UK and French governments on the EU’s proposal to regulate hedge funds and other alternative investment vehicles.

A deal is in sight on the last remaining bone of contention of the controversial directive: the creation of a “passport” that foreign fund managers would need to peddle their goods within the EU.

FACTBOX – How does the EU plan to shake up financial services?

BRUSSELS, April 7 (Reuters) – The European Union (EU) is embarking on an overhaul of financial services that politicians hope will send bankers back to their roots of no-frills lending to households and business.

Michel Barnier is the EU commissioner in charge of the shake up on regulations ranging from curbs on banker pay to a clampdown on speculators betting on government debt.

Here is a guide to the overhaul:

* One of Barnier’s priorities is writing a rule book for trading derivatives, a financial instrument whose value is linked to an asset such as a government bond or currency.

ANALYSIS – EU focus on credit default swaps may not yield bans

By Huw Jones

LONDON, March 5 (Reuters) – European governments are exploring ways to curb trade in credit default swaps but may have to settle for requiring greater disclosure rather than banning certain forms of speculation.

France, Germany and Luxembourg say “speculators” — typically code for hedge funds — used CDS contracts to bet on Greece defaulting and send the euro lower.

Faced with such political pressure, the European Commission has called national supervisors, credit rating agencies, hedge funds and investors to meetings in Brussels on Friday to help it decide if European Union action is needed in the CDS market.

Global accounting body told to improve governance

By Huw Jones

LONDON, Feb 8 (Reuters) – The world’s most influential accounting rule setter is not answerable enough to users or the public and must improve its governance further, top financial regulators said on Monday.

International Accounting Standards Board (IASB) rules are used in over 100 countries, including the European Union, with Canada, Japan and Brazil adopting them as well. The United States, however, is still mulling its position.

The IASB will become more powerful next year when its rules form the basis for a single set of global standards as called for by the G20 group of countries, sparking calls for the London-based body to be more accountable and transparent.

EU sees positive outcome on Spanish bank fund

(Adds more quotes, background)

BRUSSELS, Jan 18 (Reuters) – The European Commission said on Monday it was confident of issuing a positive decision on a Spanish government scheme to help crisis-hit banks avert any solvency problems.

Spain set up the 9-billion-euro ($13 billion) bank restructuring fund (FROB) in June last year, allowing lenders to borrow up to 90 billion euros, in a move that may spur consolidation among the country’s savings banks.

Three savings banks from northern Spain agreed last week to postpone plans to merge until the European Union’s executive Commission had ratified the FROB restructuring plan.

EU economy, tax nominees may face second grilling

By John O’Donnell

BRUSSELS, Jan 14 (Reuters) – One of the European Union’s top lawmakers has said she may demand a second hearing to quiz the bloc’s designated tax and economics chiefs before the committee she leads decides whether to approve their appointments.

The remarks by Sharon Bowles, who leads the influential economic and monetary affairs committee, cast uncertainty over the line-up of the next European Commission, in particular the would-be tax chief, who has already faced criticism.

“I would have liked more questioning time with him,” Bowles said of Algirdas Semeta, the Lithuanian candidate to take charge of EU taxation whose answers at a European Parliament hearing were described by socialists as unconvincing.

EU executive to target derivatives speculation

(Adds more detail on derivatives legislation)

BRUSSELS, Jan 13 (Reuters) – Speculation in commodity derivatives has been “scandalous” and needs to be regulated carefully, the European Union’s nominee for chief financial watchdog said on Wednesday.

“Why do we have this speculation we have had over the last two to three years in raw materials,” Michel Barnier, EU internal market commissioner-designate, said.

“I am talking about speculation which to me is scandalous on agricultural raw materials … We have to do something about that,” Barnier told a confirmation hearing in the European Parliament.

EU’s Barnier says will mull short-selling curbs

By John O’Donnell

BRUSSELS, Jan 13 (Reuters) – The European Union’s designated financial services chief has pledged to examine curbs on short-selling and extend a planned regulatory shake-up to every corner of the industry, blamed by many for the economic crisis.

Outlining his plans to push through a welter of rules that will tighten the policing of banks as well as curbing runaway borrowing, Michel Barnier said: “We need to turn the page on an era of irresponsibility.”

“We are going to reform. No market, no financial player … should be able to escape. I will not shy away from the difficult subjects of sanctions and short-selling.”

EU exec likely to sue Greece over statistics mess

By Jan Strupczewski

BRUSSELS, Jan 12 (Reuters) – The European Commission is likely to launch infringement proceedings against Greece for failing to provide reliable statistics on its budget deficit and debt, an EU source with knowledge of the proceedings said on Tuesday.

The Commission, the European Union’s executive arm, is responsible for upholding EU law. It had already once launched proceedings against Greece for unreliable deficit statistics in 2004, but closed them in 2007.

“There will probably be another infringement procedure… because providing timely and reliable statistics is an obligation under EU law and they have failed in their obligation,” the EU source said.