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BackOn Monday, the European Central Bank (ECB) and the European Commission organised a conference on the subject of “Strengthening the Foundations of Integrated and Stable Financial Markets”. Apart from representatives of ECB, Banking Supervision and Commission, the liberal MEP and chair of the Economics Committee Sharon Bowles, Mario Draghi, Governor of the Italian Central Bank, Samir Assaf of HSBC, Martin Hellwig, liberal economist at the Max-Planck-Institute and Franco Bassanini, who has set up an Italian Think Tank on state reforms, discussed the latest developments on the financial markets.
Ingazio Angeloni of the ECB presented the new ECB report “Financial Integration in Europe” and Francisco Caballero-Sanz of the European Commission the “European Financial Stability and Integration Report”. There were some positive developments in the money and stock markets, said Angeloni. Even if there were big differences between the interest rates of the Member States, the spread would still be smaller than before the monetary union. A greater integration of the financial markets would be desirable. Caballero-Sanz too confirmed the existence of positive developments. However, sovereign debt and economic imbalances were new developments, which caused concern. He stressed that further integration of the financial markets would be important.
The EU Commissioner for Internal Market and Services Michel Barnier and Vitor Constâncio, Vice President of the ECB pointed out that the EU had reacted very quickly and created a new financial market architecture in a short period of time. The European System of Financial Supervision (ESFS) came into effect on 1 January 2011. It consists of the European Systemic Risk Board (ESRB), the three European supervisory authorities (ESA) and a joint committee of ESAs and the central banks of the Member States. The ESRB is responsible for macro-prudential supervision of the financial systems in the European Union. The three ESAs are sectorally divided into the European Banking Authority (EBA), the European Security and Markets Authority (ESMA) and the European Banking Authority for European Insurance and Occupational Pensions Authority (EIOPA).
Mario Draghi, who is one of the candidates to replace ECB President Jean-Claude Trichet, argued that although one could notice a recovery from the crisis it was still fragile and uneven. There were great imbalances between the states, high national debt and states would follow different economic policies. The adopted measures, such as Basel III had to be implemented now and gaps had to be closed, said Draghi. Stress tests were also important to repair the banking system.
Europe has demonstrated to act on the whole front, as for example when the loan package for Greece with a strict conditionality was created, commented Olli Rehn, EU Commissioner for Economic and Monetary Policy. Many would claim that the strategies for Greece had not worked, but that was not true. Greece was only at the start of her reforms. “Debt restructuring would have devastating effects on the countries and Europe as a whole”, said Rehn. Bassanini, Assaf and Bowles conceded that tightening the rules (such as Basel III or Solvency II) would result in the fact that fewer long-term investments would be made.
Many of the discussion participants emphasised how important it was to further integrate the financial markets to tackle liquidity problems. No representatives of civil society and trade unions, but only representatives of the institutions and liberal economists took part in the discussion. Hence, there was little said about alternative measures, such as a reduction of the speculation volume or problems caused by commodity speculation.
Additional links:
Report of the European Commission: “European Financial Stability and Integration Report 2010”
Report of the European Central Bank: “Financial Integration in Europe 2011“
The EU Commissioner for Internal Market and Services Michel Barnier and Vitor Constâncio, Vice President of the ECB pointed out that the EU had reacted very quickly and created a new financial market architecture in a short period of time. The European System of Financial Supervision (ESFS) came into effect on 1 January 2011. It consists of the European Systemic Risk Board (ESRB), the three European supervisory authorities (ESA) and a joint committee of ESAs and the central banks of the Member States. The ESRB is responsible for macro-prudential supervision of the financial systems in the European Union. The three ESAs are sectorally divided into the European Banking Authority (EBA), the European Security and Markets Authority (ESMA) and the European Banking Authority for European Insurance and Occupational Pensions Authority (EIOPA).
Mario Draghi, who is one of the candidates to replace ECB President Jean-Claude Trichet, argued that although one could notice a recovery from the crisis it was still fragile and uneven. There were great imbalances between the states, high national debt and states would follow different economic policies. The adopted measures, such as Basel III had to be implemented now and gaps had to be closed, said Draghi. Stress tests were also important to repair the banking system.
Europe has demonstrated to act on the whole front, as for example when the loan package for Greece with a strict conditionality was created, commented Olli Rehn, EU Commissioner for Economic and Monetary Policy. Many would claim that the strategies for Greece had not worked, but that was not true. Greece was only at the start of her reforms. “Debt restructuring would have devastating effects on the countries and Europe as a whole”, said Rehn. Bassanini, Assaf and Bowles conceded that tightening the rules (such as Basel III or Solvency II) would result in the fact that fewer long-term investments would be made.
Many of the discussion participants emphasised how important it was to further integrate the financial markets to tackle liquidity problems. No representatives of civil society and trade unions, but only representatives of the institutions and liberal economists took part in the discussion. Hence, there was little said about alternative measures, such as a reduction of the speculation volume or problems caused by commodity speculation.
Additional links:
Report of the European Commission: “European Financial Stability and Integration Report 2010”
Report of the European Central Bank: “Financial Integration in Europe 2011“