Commission Initiatives on Financial Regulation

The Commission has put forward a number of initiatives on the regulation of the financial markets.

The Commission has proposed a more centralised system for supervision of Credit Rating Agencies at EU level. The European Securities and Markets Authority (ESMA) – would be entrusted with exclusive supervision powers over CRAs registered in the EU. ESMA would have powers to request information, to launch investigations, and to perform on-site inspections.

The Commission is also launching a public consultation on a Green Paper for improving corporate governance in financial institutions. The Green Paper details possible ways forward to deal with the following issues:

  • How to improve the functioning and the composition of boards of financial institutions in order to enhance their supervision of senior management;
  • How to establish a risk culture at all levels of a financial institution in order to ensure that long-term interests of the business are taken into account;
  • How to enhance the involvement of shareholders, financial supervisors and external auditors in corporate governance matters;
  • How to change remuneration policies in companies in order to discourage excessive risk taking.

In its Communication on Financial Services 2010-2011 the Commission has outlined the remaining financial reform proposals needed to implement fully our G20 Commitments:

  • proposals to improve the functioning of Derivatives markets;
  • measures on short selling and credit default swaps;
  • improvements on the Markets in Financial Instruments Directive (MiFID);
  • a revision of the Deposit Guarantee Schemes Directive and the Investor Compensation Schemes Directive;
  • legislative proposals on packaged retail investment products;
  • revisions of the Market Abuse Directive;
  • amendments to the Capital Requirements Directive (CRD IV) to improve the quality and quantity of capital held by banks, introduce capital buffers and ensure the buildup of capital in good times;
  • an action plan on crisis management leading to legislative proposals for the prevention and resolution of failing banks.

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