Verbatim report of proceedings

Tuesday, 10 July 2007 - Strasbourg

6. Financial services policy (2005-2010) – White Paper (debate)

  President. – The next item is the report by Ieke van den Burg, on behalf of the Committee on Economic and Monetary Affairs, on financial services policy 2005-2010 – White Paper (2006/2270(INI)) (A6-0248/2007).

  Ieke van den Burg (PSE), rapporteur. – Mr President, in drafting this report for the European Parliament, I have wholeheartedly congratulated Commissioner McCreevy and his predecessor, Mr Bolkestein, on the success of the financial markets legislation and regulation and the executive work of the European Commission in this respect. We have no disagreements about that. We may differ, though, with respect to the assessment of further steps and the priorities for the follow-up.

I think this is linked to a difference in perspective. For me, it is not enough just to look at the success of this financial sector as such. I see this sector as instrumental, and want to assess whether it provides the right infrastructure for economic growth, wealth and well-being. That is why in my report I focus first on the strategic question of who is profiting from this success.

Are end users profiting to the same extent as the few large multinational financial conglomerates that have acquired dominant positions at the top of the financial markets? Who is profiting most from the increased liquidity in the markets? Is it KKR, Blackstone and the other private equity firms that do billion-dollar deals, or is it the companies that are covered because they see credit ratings tumble down to junk status? Do entrepreneurs still dare to invest in long-term research and development projects for the development of innovative new products and services, or are they squeezed in ever shorter cycles of financial planning and reporting? Is the huge increase of complex financial products derived from the traditional bonds and equities really leading to a better allocation of capital, or does it contribute mainly to greater speculative profits for the hedge funds that master the rules of the pyramid game? Are citizens in the recently-acceded Member States better off now with the invasion of foreign banks and insurance companies in their countries, or are they confronted again with monopolistic structures that only provide them with standard, mediocre-quality products at prices higher than in the countries where they have their headquarters?

These and similar questions seem to me to be fundamental to answering the question of what kind of follow-up is required, and the first preliminary message in my report is thus to make more in-depth economic analysis about that.

I shall turn now to the priorities outlined in my report. The first message deals with one of my great concerns, the enormous market concentration at the top of the market, with 30 to 40 major cross-border financial players and a high concentration in several Member States. In the competition report that we adopted at the last part-session, we voiced our concerns and suggested that Commissioner Kroes put on her list of possible enquiries and further investigations the activities at the top of the financial market of investment banks, credit rating agencies, accounting firms, etc. We repeated this suggestion to her last week.

The second issue is the financial stability risks of these new developments of alternative investments – hedge funds, private equity. I do not have to go into detail there because the papers daily show that there are currently more concerns at the developments. Prudential supervisors, central banks, the ECB and our counterparts in the USA, whom we will visit next week, also raised these concerns and I think it is high time that we dealt with these risks.

The third issue is the retail markets. My answer to the lack of integration at the retail side is not just to overhaul this system and open up the borders but to make a more precise focused strategy, particularly for mobile users, who have a real need in terms of accessing and working with service providers in different Members States, so that could be more of a stimulation for pan-European financial products such as the pension product that was presented some weeks ago by the European Banking Federation.

Demand for microcredit is an important issue, as are pension systems, access to basic services, financial education and stronger consumer input and, finally, better regulation and the future architecture of supervision. On this issue, I think the main difference is that your mantra is ‘less is more’, as you said last week. We think that we need a focused regulation. As regards the architecture of supervision I would say that it will be high time to discuss the future architecture in the autumn and not just wait and see what will happen, although there are a lot of good developments.

  Charlie McCreevy, Member of the Commission. Mr President, I would like to commend the Committee on Economic and Monetary Affairs and in particular the rapporteur, Mrs van den Burg, for the initiative she has taken and the hard work put into this report.

It is no easy task to tackle the very wide-ranging policy area of financial services in one report, as it ranges from banking to clearing and settlement, and hedge funds to payment systems. The report you have drawn up is an admirable achievement in that respect.

I would also like to say how pleased I am to see such an apparent convergence of views on so many aspects of financial services policy. Although we may approach subjects from a different angle sometimes, it is very encouraging to note how, in many respects, we are on the same page.

The European Parliament and the Commission are united in wanting Europe’s financial markets to go from strength to strength. We all want deep, liquid, dynamic financial markets that act as a real catalyst for investment and growth and ultimately bring benefits to all our citizens. We also want our regulatory and supervisory systems to be stable, fair and efficient and we all want to strengthen Europe’s place on the global financial stage. It is essential that we keep working towards these goals.

I warmly welcome the considerable attention given in the report to the issue of supervision. This is an absolute priority for the Commission in 2007. We are working intensively on our proposals to strengthen the Lamfalussy process due in the autumn this year and we agree with the concerns of the European Parliament on the issue of burden-sharing between home and host supervisors.

With regard to retail financial services, it is striking that many of the subjects touched upon in this report are included in the consultation on the Green Paper on retail financial services, which closes this week. I would argue, however, that we should not limit our ambition to finding solutions for the ‘mobile consumer’. We need our policies to make a difference to all consumers, even those who continue to shop locally. I welcome the support given in the report to initiatives on financial education, an issue on which the Commission is preparing a communication to be adopted towards the end of this year.

I acknowledge the concerns raised in the report with regard to alternative investments such as hedge funds and private equity. As I have stated on other occasions, I believe that we have the necessary regulatory safeguards in place already, but agree with you that constant vigilance will be essential. I also welcome some recent industry-led initiatives to develop voluntary standards or best practice on valuations, disclosure and risk management.

The concerns you express on market concentration in certain specific areas are understandable, although we have yet to receive indications of a problem of market distortion in the investment banking area. Work is already under way to mitigate some of the potential problems, for example through the International Organisation of Securities Commissions’ Code on Credit Rating Agencies, which we closely monitor. These initiatives must be given time to prove their effectiveness. Developing a knee-jerk reaction to a far from unsubstantiated problem would be much more damaging.

I welcome the European Parliament’s support for our regulatory dialogues with key international partners. On global accounting issues, steps are being taken, particularly through the establishment of working groups of the European Financial Reporting Advisory Group, to make European views and inputs more influential in the global accounting debate, something I can only applaud.

However, we cannot take our eyes off the main goal, and that is the continuing convergence process between US GAAP and International Financial Reporting Standards. I trust we can rely on your continued support as this process continues.

In summary, I can only reiterate that, as far as financial services policy is concerned, even if one or two notes clash slightly, we are certainly singing from the same hymn book.

  Jean-Paul Gauzès (PPE-DE), draftsman of the opinion of the Committee on Legal Affairs. – (FR) Mr President, Commissioner, ladies and gentlemen, I approve of the European Commission’s priorities regarding financial services policy until 2010. It is indeed necessary to consolidate the progress made towards an integrated European financial market that is open and competitive, and to eliminate the last economically significant obstacles so that capital can circulate freely in all of the European Union, at the lowest possible cost and with an appropriate level of prudential supervision, so as to ensure financial stability.

It is also essential to improve cooperation and convergence with regard to supervision in the European Union and to deepen relations with other global financial marketplaces. It seems to me vital to continue the consolidation of the financial services sector, and, more particularly, the integration of retail markets. The more financial markets, which play an important role in the good functioning of modern economies, are integrated, the more effective the distribution of economic resources will be, and the better the economic results will be in the long term.

With regard to retail, it is necessary to go further in order to progress integration. We need to consider particularly the issue of harmonisation of national rules for the protection of consumers. Efforts must be followed up. The European Union’s financial services sector conceals a considerable potential for economic growth and employment that has not yet been fully exploited. The internal market for retail services is far from being complete; a more effective risk capital market is essential to promote new and innovative businesses and to strengthen economic growth.

With regard to this, I should like to highlight the importance of promoting the competitiveness of European banks in relation to their competitors, particularly the American banks. It is important, finally, to ensure that Community structures are set up in respect of regulation and supervision. The fragmentation of prudential supervision constitutes one of the major obstacles to consolidation of the financial sector. That is why the requirements of cooperation and exchange of information between the supervisory authorities must be strengthened. We should also ensure the security of cooperation in a crisis situation.

  Othmar Karas, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, rapporteur, yes, we must continue to strengthen the financial market. The financial services action plan until 2004 contributed to the development of an integrated and smoothly functioning European capital market which has become a world leader, not least because of the strength and soundness with which it is regulated. We are not finished by a long chalk, though, as the present report shows. The rapporteur originally envisaged 43 items. There were 217 amendments to these. Together with the shadow rapporteurs – I would like to excuse Mr Hoppenstedt – 35 compromises were drawn up, and there were 141 Committee votes.

On this issue we are all headed in the same direction, because we need a stronger internal financial market. CEPS, CESR, CEIOPS and lead supervisor are all terms expressing the quest for an ideal structure for European financial markets supervision. The latest crisis simulation to check financial stability in the European Union has shown clearly that we have still been found wanting.

Better coordination between the competent supervisory bodies is needed to guarantee appropriate management and thus financial stability in times of crisis. A similar simulation is planned for 2009. What all the variants in the EU have in common is that the main focus of supervision continues to lie with individual institutions rather than with the institutional group. What we need, therefore, are supervisory structures which will continue to develop. We need stronger coordination between the national supervisory authorities. We do not need centralised supervision, but we need to promote the dominant supervisory culture which is marked by identical aims and values.

  Pervenche Berès, on behalf of the PSE Group. – (FR) Mr President, Commissioner, as you know, for my group, the market is not an end in itself, the market has to finance a strategy. The European Union has just renewed this strategy exceptionally on 9 March, around what I shall call the strategy of 20: in 2020, 20% of…, etc., I shall not go on. That is why we need to integrate a coherent financial market.

Much has been done, but there is still much more to be done. Among the things still to be done, there is of course the matter of retail markets. On that subject, we think that a very particular approach should be central to the Commission’s strategy. Of course, it will be necessary to encourage financial education, it has almost become a fashionable subject and you will have the support of my group when it comes to developing this kind of education. It is necessary also, however, as we pointed out when considering the Markets in Financial Instruments Directive (MiFID), to investigate the conditions in which financial products are proposed to investors, to consumers and small savers: it is the question of the conditions in which financial products are marketed that we must also take a close look at.

There remains the debate that has just begun, with much fuss under the German Presidency, in relation to alternative funds, hedge funds. The very fact that a code of conduct could have been thought of at international level shows how much this debate has changed. For all that, the actors in this market benefit from opportunities created by integration. That gives them certain responsibilities and duties. From this point of view, I think that my group does not share the point of balance that has been achieved. If we wish to guarantee the safety of the system, we must take the discussion further, including when it comes to looking at the conditions in which prime brokers are judge and judged in the matter.

Next there is the question of market structures. The legislation that we are adopting has an impact on market structures and we cannot ignore that. In defining our legislation segment by segment, we must have a clear idea of the financial market we want in order to better respond to the financing needs of the European economy. A financial market whose main beneficiaries are the big investment banks located outside the European Union – is that really what we are dreaming of? I do not think so. We must integrate a strategy that allows each actor to find its place in the overall balance.

Then, of course, the major subject that is before us is the matter of supervision. I entirely share our rapporteur’s views on this point. The power and legitimacy of Level 3 committees, the supervisors, must be strengthened; each national supervisor must have an obligation of European convergence. In this way, we shall ensure the safety of the system and we shall be able to use this integrated supervision as a better tool to put in place a European market.

  Margarita Starkevičiūtė, on behalf of the ALDE Group. – (LT) As colleagues have already noted, European financial market leads the world, and we should keep implementing policies that would enable Europe to remain the premier world market. What kind of policies do we envisage, fellow liberals? First and foremost we need a policy that is effective and open to innovation and new products. Priority should be accorded to self-regulatory mechanisms without creating barriers to the advent of new financial products. Regulation is applied so that equal competition conditions can be ensured for both large and small enterprises. I would particularly wish to highlight the words 'small enterprises'. Very often the Commission only considers the interests of large enterprises.

We also want there to be appropriate supervision. Appropriate supervision does not mean finely detailed supervision; it means supervision conducted according to certain principles. For these principles to be applied uniformly in the various countries, we would like to see national governments and likewise the Commission, and the Members of Parliament themselves paying more attention to ensuring that national supervisory bodies cooperate more widely among themselves and with other bodies in the financial sector.

We would also like to see the challenges of financial market consolidation and systematic risk assessed so that it is clear to consumers who will pay in the end if one or another institution, a large European institution, fails to work successfully. We would also like to see a financial market in which the interests of retail clients are heeded – the interests of a million ordinary EU residents.

What kind of market should that be? At the retail level the market has to rely on an open structure so that a wide range of financial products are accessible and to avoid a situation in which only the products of one bank are offered in certain countries, and so that people in all countries may have an equal opportunity to avail themselves of the variety and innovative potential of the EU market. We would like to see the creation of certain products to be available across the EU so that workers are able to circulate freely from one country to another. There is also talk about various pension products and mortgage credits.

We also want a cost-effective market. What is meant by costs that suit a retail consumer? That does not mean regulation; it means transparency. There has to be a clear cost structure for financial services so that every retail consumer may choose a suitable package according to his circumstances and how much he can afford, and we hope that in this way the European financial market will remain the most competitive in the world.

  Sahra Wagenknecht, on behalf of the GUE/NGL Group. – (DE) Mr President, ladies and gentlemen, the report’s section on Alternative Investment Vehicles, amongst other things, mentions hedge funds and private equity firms, regarding which this House must make a clear decision. Hedge funds are known the world over for their aggressive policy of exploiting labour, plundering enterprises and recklessly destroying jobs, and they are rightly compared with locusts.

The wording of the report falls far short of addressing these dangers. We need clear and unambiguous definitions. The guidelines for hedge funds and private equity funds must regulate the following: minimum requirements for the equity capital of these funds, all gains on disposal to be subject to the income and profit tax in the country where the management company has its headquarters, duty to register, duty to disclose asset structure, the ownership structure and ongoing transactions, and much more.

Our group has tabled amendments to this end, and hope that you will take them into consideration when voting.

IN THE CHAIR: MRS MORGANTINI
Vice-President

  John Whittaker, on behalf of the IND/DEM Group. – Madam President, the financial services action plan is a huge, complex body of regulation. In the vain attempt to harmonise financial products and to legislate risk away, the only effect will be to drive business out of the European Union. Even the City of London is now realising that the costs of compliance with the Markets in Financial Instruments Directive are likely to be far greater than any benefits from greater market access. And there are always unwanted side effects. The rapporteur complains that not enough is being done for the retail consumer of financial services. She says the basic needs for every citizen are access to a bank account, financial transfers at low cost and the possibility to save or borrow money. But the largest impediment to retail banking is the highly bureaucratic know-your-client procedures that banks must follow as a result of the EU’s own money-laundering regulations. In English, we would call this ‘shooting yourself in the foot’.

  Petre Popeangă, în numele grupului ITS. – Consider că o lucrare având ca obiectiv stabilirea unei politici pe termen mediu în domeniul serviciilor financiare este una a cărei necesitate şi importanţă nu pot fi puse la îndoială.

Concentrarea pieţei, mijloacele alternative de investiţii, accesul la finanţare în sectorul cu amănuntul, riscurile sistemice, îmbunătăţirea prevederilor legale şi altele reprezintă categorii importante de activităţi a căror aplicare la nivel naţional, ca şi impactul acestora la nivel global, justifică asemenea acţiuni iniţiate şi la nivelul Uniunii Europene.

Necesitatea unui asemenea demers rezultă în primul rând din necesitatea asigurării unei transparenţe sporite şi a unui spaţiu de acţiune uniform pentru concurenţă, dar şi din necesitatea separării diferitelor servicii furnizate consumatorului şi, nu în ultimul rând, de gama limitată a produselor cu amănuntul oferite de către grupurile financiare care operează pe pieţele naţionale.

Cantonându-mă din lipsă de timp doar la domeniul protecţiei consumatorului, menţionez că, deşi acesta este considerat la nivelul Uniunii Europene ca fiind una din activităţile prioritare, practica demonstrează că în anumite zone nu se ridică la cotele necesare fie datorită insuficienţei prevederilor legale, fie din lipsa unor garanţii certe că furnizorii de servicii sunt organisme fiabile şi solide din punct de vedere financiar.

Cu aceste câteva precizări, menţionez că susţin aprobarea propunerii raportorului privind Carta Albă a Comisiei referitoare la politica serviciilor financiare în perioada 2005-2010, ca şi a propunerilor referitoare la organizarea de dezbateri pe tema fondurilor speculative, puncte de vedere care constituie, de altfel, şi poziţia autorităţii competente din România faţă de problematica pieţelor de instrumente financiare.

  Gunnar Hökmark (PPE-DE). – Madam President, I wish to begin by thanking the rapporteur.

There are certain things we have to ask ourselves as we proceed with the financial services and the reform process, and that is whether we want the European financial markets to be vital and dynamic and at the centre of the global financial development. The answer is obviously ‘yes’.

However, we also need to be sure that they can be attractive globally and that they can attract capital and vitality. That gives us some aims, because we must have regulations in place to ensure transparency and credibility, and we should avoid regulations aiming to regulate the competition, the product and the services. It should be the opposite. We should ensure that we have fundamental common rules that give way for the new future-oriented financial services here in Europe. This is a balance where I would like the final outcome of the report to be more open-minded, advocating opening up for competition. I should like to stress that there should not be any sort of economic patriotism in the financial sector in Europe, because that would hinder the dynamic development and growth of European financial markets. With regard to the future of the financial services in Europe, we should head for the words of the French Revolution: liberté, égalité, fraternité. That is competition and that could create dynamics in the European financial markets.

  Harald Ettl (PSE). – (DE) Madam President, a well-functioning, integrated capital market would be an important foundation for the European economy in the current climate of rapid globalisation. We should thank the rapporteur not just for focusing on the economic success of European capital markets, but also the spread and the resulting benefits as well as the potential risks.

Financial services are a good thing when they meet our society’s demands and benefits it, but this requires heightened controls. Leaving the market to its own devices encourages abuse. Even if hedge funds and private equities were able to secure market diversification, the danger of systemic risks with excessively negative impacts, for instance, through failures in asset management, conceals an uncontrollable potential for crisis. For example, the business practices of hedge funds change rapidly. Even the financial market authorities in London are noting a growing number of instances where disclosure requirements are flouted.

Clever market players are always finding new ways to disguise their activities, as we frequently hear from the Neue Zürcher Zeitung. The result is some clever surprise tactics in corporate takeovers. The employees who are ultimately responsible for sustaining the value of national economies will increasingly become the toys in the hands of capital interests. In order to prevent this without jeopardising the prosperity of the market, and to provide better profit distribution we need more input from the competent committees. The economy should not decide on its own what is good for it, but politics have to regulate and monitor the economy, to the long-term benefit of society in the European Union in the long term.

  Sharon Bowles (ALDE). – Madam President, I have three words of caution, or three points, on our report. Firstly, where I have disagreed most in this report is in the fashion zone, where it is de rigueur to criticise private equity and, even more so, hedge funds. It can be good to look at things, analyse and discuss, but it is then wrong to prejudge what is needed as the outcome just in order to be fashionable.

Secondly, in paragraph 6 we refer to the concentration of financial services provided to large listed companies. It may be proper to mention audit firms in this context as their consolidation has left us with less than a handful that can do large audits. However, it is not correct to suggest that investment banks are in a comparable concentration, given that none of the top three have a 10% market share. Indeed, viewed in that light, to mention investment banks dilutes the very point we wish to make about audit firms.

Thirdly, with the regard to the issue of supervision, this is very interesting, but cooperation and changes are under way. Levels 2 and 3 have to bed down and be refined. How can the next stage be evaluated before outcome of the last is known?

  Alexander Radwan (PPE-DE). – (DE) Madam President, Commissioner, I would like to start by expressing my heartfelt thanks to the rapporteur for her work, with which she has succeeded in uniting a broad political spectrum in the European Parliament.

The single market for financial services in the EU has been a success story. The recommendations of the Commission, their implementation by Parliament and the Council and in Member States will result in the European financial market gradually becoming more attractive than the US financial market. This is further illustrated by the fact that European stock markets are being bought up by Americans so that they can secure their influence on them. This has led to new developments, and begs the question of how we should approach the new events on the market.

A main point is the future of controls in Europe. The development of trans-border banks is a case in point. I will mention only UniCredito, the Bavarian-based HypoVereinsbank, and Bank Austria. We also discussed ABN Amro and the Bank Santander that was bought up in Britain. We have to ensure that the supervisory authorities keep an eye on these events, so that we do not have a single supervisor for each Member State, but that there is Europe-wide cooperation. That is not a request for a European supervisor, but we must bring European development further to the centre of attention.

Basle II and the lead supervisor were the first step in this direction. I wholeheartedly support the Commission to take a courageous approach in Solvency II. I hope that the national supervisors and national finance ministries will become more cooperative in this respect, and show more support for the amendments than they have shown so far.

We also need to give some thought to how we will shape the transatlantic relationship in the future. The way things stand, the SEC – the American supervisory authority – always has an indirect effect on regulating the European market. This should not be happening. We need a European response to the SEC which seeks to prevent this from happening. I cite the example of an Austrian bank which had to get rid of its clients because it was being bought up by an American fund, and the clients were Cuban.

Commissioner, the Commission regularly deals with regional banks. Quite rightly, too. Mrs Bowles, I do not want to anticipate the result of the discussion, but we need to discuss hedge funds in an open debate. What we cannot say is let us avoid the issue because we are afraid of the result.

  Antolín Sánchez Presedo (PSE). – (ES) Madam President, financial services are a strategic source of efficiency and prosperity in a globalised economy. I would like to congratulate the rapporteur, Mrs van den Burg, on her report, which represents an in-depth reflection and a valuable contribution to the future of the financial services policy, establishing important guidelines for taking advantage of their potential.

Firstly, by increasing our strong points, following the approach of the March resolution of eliminating obstacles with a view to facilitating trans-European acquisitions and acquisitions of shares in banking, insurance and investment companies, so that our operators can take advantage of the internal market and prepare to compete with global driving forces.

Secondly, by reducing weaknesses. There is a clear example in ratings activities, where this weakness exists as a result of a regulatory vacuum and the absence of European operators. The report proposes suitable ways to deal with both issues.

Thirdly, by controlling risks, both those that affect general financial stability and the operative risks that result from distortions or incorrect operation of the market and unfair practices or insider dealing, or those that result from the excessive concentration of certain top-segment financial services activities amongst large companies, such as ratings agencies, the large audit firms and investment banks.

These are dealt with correctly too. On the one hand, through close monitoring on the part of competition authorities in order to prevent abuses and barriers to new entrants, and on the other, by calling upon the Commission, in line with its sectoral studies approach, to examine the situation in depth, and finally, to make progress on the integration of European financial supervision.

With regard to the architecture of financial supervision, although the current system is not perfect, it is working reasonably well and deserves to be treated in an evolving manner as the rapporteur proposes. Cooperation between supervisory authorities needs to be strengthened, and that will only be possible if we take a European view, that is to say, by moving towards a common European culture and by means of practices that enable national supervisory bodies not just to have similar practices, but also competences and mandates that make it possible to use new techniques and instruments.

  Charlie McCreevy, Member of the Commission. Madam President, as I indicated earlier, the report under discussion shows that Parliament’s and the Commission’s thinking on key financial services issues is very much in harmony. Both our institutions are thinking ahead beyond 2010, which is the date that our current policy works towards. We are aware of the potential innovations and hazards that lie around the corner. We are working on how to make our supervisory structures work better. We are building strong relationships with our regulatory partners in other jurisdictions, knowing that our interlinkages will only increase.

We are constantly looking for ways to ensure that our financial markets work to the benefit of all citizens.

Given the positive collaboration between the institutions I am sure we will be successful.

  President. – The debate is closed.

The vote will take place on Wednesday 11 July 2007.

Written statements (Rule 142)

  Gábor Harangozó (PSE), in writing. – First of all, I would like to warmly congratulate the rapporteur, Ieke van den Burg, for her excellent report on the White Paper on the financial services policy 2005-2010. This report and the White Paper are indeed of the utmost importance since it is obvious that the creation of a genuine European world leading capital market in line with the objectives of the Lisbon agenda relies profoundly on the viability and consistent nature of the Community’s financial regulations. Besides the viability of the financial regulations in line with the objectives of better regulation, it is necessary to foster the transposition of Community law by the Member States in order to achieve efficiently the thorough implementation of the Financial Services Action Plan (FSAP). It will of course be necessary to assess the real effects of the implementation of the FSAP for its beneficiaries and, in this respect, I fully support the rapporteur when she calls for a more in-depth examination of the economic effects of the FSAP measures in the light of the Lisbon Strategy. Consistent implementation and continuous evaluation of the financial regulations are indeed the key elements for a successful achievement of a dynamic European world leading capital market.

  Piia-Noora Kauppi (PPE-DE), in writing. – This past spring has been an appropriate time to discuss the future of financial services policy in the EU. Groundbreaking changes are afoot, both on the regulatory side and in the markets’ own development. Seldom has a week gone by without a significant development with direct impact on the functioning of European financial markets, and on how we, as legislators, should address them.

The growing number of marriages between stock exchanges is probably the most visible. As banks and other trading venues are attracting larger volumes of trade, it is only normal that exchanges seek to pool their strengths. The upgrade and modernisation of our trading infrastructure will benefit investors, and spur more innovation in financial instruments.

The big question now has to do with supervision. We should not approach this only from a worst-case-scenario viewpoint. It is true that there are legitimate concerns as regards the regulation of various private pools of capital. Nor is it yet clear what happens if and when something goes wrong. But for now, let us work towards a convergence of practices in the Level 3 committees. In the long-run, Parliament signals it is willing to see something more unified on the European supervisory scene.