The European Financial Services Round Table (EFR), has prepared a report titled “Harmonization of Regulation and Supervision of the European Financial Sector,” calling for increased harmonization on a European level, of the regulations and the supervisory organizations that set the rules for the EU’s banks and insurers.
The EFR is composed of representatives from Europe’s biggest financial services companies, including many representatives from the insurance industry. Its announcement said that both customers and companies alike could benefit from the potential opportunities that successful harmonization would create.
“Integration of the European financial markets makes the economy grow,” stated Anton van Rossum, sponsor of the EFR Task Force on ‘Regulation and Supervision’ and CEO of the Dutch/Belgian Fortis Group. “European cross border banks and insurers are helping this integration by offering their customers a more pan-European product range, promoting pan-European best practices and having by definition a less protectionist attitude,” he continued. “But our cross-border activities are hampered by different sets of rules and supervising mechanisms. These hurdles block potential benefits.”
The bulletin indicated that in order to “avoid increasing divergence, action is becoming urgent.” Van Rossum pointed to the differing definitions of “solvency,” which vary from country to country as an example.
The entire report is available on www.efsrt.org. Some of its major recommendations were as follows:
— Concentrate on solvency/liquidity as full harmonisation is feasible and urgent;
— Promote convergence of supervisory practise (e.g. change supervising organisation only after consultation);
— Implement Directives in time and harmonize reporting schemes;
— Apply ‘home country control’ generally, based on lead supervisor;
— Define tasks and timing of working groups within Lamfalussy approach.
Ed. Note:No, I don’t have the slightest idea what the “Lamfalussy approach” is, but if anyone does, I’d certainly like to know.
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