MINISTER FOR Finance Brian Lenihan has said the new pan-European system of financial regulation will not damage the International Financial Services Centre (IFSC) in the Dublin docklands.
As EU finance ministers overcame a dispute between Britain and France over the scope of the three-pronged system, Mr Lenihan made little of concerns that the new regime would damage the IFSC’s allure for international institutions.
“I’m confident that we can work through the issues in relation to the IFSC and that whatever supervision system emerges can provide what the IFSC wants, which is quick speedy decisions,” he told reporters in Brussels.
The system agreed by ministers will create a European Supervisory Authorities (ESAs) with responsibility for banking, insurance and pensions, and securities and markets authority.
A new European Systemic Risk Board (ESRB) will monitor potential threats to the stability of the financial system.
The plan is designed to strengthen financial supervision to prevent a rerun of Europe’s banking crisis, which has resulted in huge public bailouts throughout the bloc and widespread nationalisations.
However, the plan will have to be approved by the European Parliament, where resistance to the reform initiative has already surfaced.
Political negotiations will be required.
Although the plan is weaker in some respects than original proposals from the European Commission, outgoing internal markets commission Charlie McCreevy expressed hope that the provisions would not be diluted further.
“I wouldn’t like any considerable watering down of the new proposals,” he said at a press conference.
The three supervisory authorities would comprise high-level representatives of all the national supervisory authorities under a permanent chairmanship, EU ministers said.
“The national authorities will remain responsible for day-to-day supervision of individual firms, and a steering committee will be set up to ensure co-operation and to co-ordinate the sharing of information between the ESA and the ESRB.”
While British chancellor Alastair Darling had expressed concern that the new system could damage the interests of the City of London, the plan agreed yesterday includes voting and appeal procedures to enable countries to act against the new authorities if they feel they are overstepping their remit.
Mr Lenihan said he stood behind France and Germany, stating that he did not share British concerns about the new system.
