"No player will escape" financial services regulation, Commissioner Michel Barnier promised MEPs on Wednesday. However, he could not give a definite timetable for legislative proposals to resolve the banking crisis, saying that more consultations were needed.
Mr Barnier told the Economic and Monetary Affairs Committee that although the Commission's work was far from done, it would be done, and would leave no financial services player able to escape regulation.
The Commissioner also stressed that bank crisis management plans, shadow banking, and better protection of consumers' investments would be his most immediate priorities. He added that the Commission would be preparing a consultation document focusing on the long-term financing of the real economy.
Closing the casino
Pablo Zalba Bidegain (EPP, ES), asked bluntly, "When is order going to be brought to the financial sector?"
Philip Lamberts (Greens, BE), told Mr Barnier that there was only one way to help the real economy. "Close the casino!" he said, adding that much more must be done to regulate high-frequency trading.
Elisa Ferreira (S&D, PT), asked whether the Commission would propose specific legislation on "shadow banking".
"I accept that we are not going fast enough on high-frequency trading, but I have to be realistic", said Mr Barnier, adding that the Commission would go further on shadow banking, even though some issues were already being dealt with in other proposed legislation such as CRD IV.
Sven Giegold (Greens, DE), asked whether there were any plans for insurance guarantee schemes and whether crisis management was also needed for insurance companies.
Jurgen Klute (GUE/NGL, DE), called for more than just voluntary schemes with regard to the provision of basic banking services.
"I have never believed in self-regulation. It has caused much damage. We need to do more on banking services", Mr Barnier replied. For the insurance sector, he replied that the Commission would be looking into the matter once legislation on deposit guarantee and investor compensation schemes was hammered out.
"There are going to be unintended consequences from all this technical legislation. How do you plan to react quickly to these consequences?" asked Vicky Ford (ECR, UK).
"Follow up will be as important as announcements and we do have review clauses in all the legislation we are adopting", Mr Barnier replied.