Verbatim report of proceedings

Monday, 23 November 2020 - Brussels

Markets in financial instruments: amending information requirements, product governance requirements and position limits to help the recovery from the COVID-19 pandemic (debate)

  Mairead McGuinness, Member of the Commission. – Madam President, I know from being in the chair that it’s difficult sometimes to keep watching everything, and I look forward to our next item.

But look, I want to be very clear to colleagues who are suspicious about what we are doing in the Commission, and maybe it’s good that this item is first up on my agenda. I am no supporter of light-touch regulation, and I’m going to repeat that for all ears: I do not support light-touch regulation.

The second observation is that our banks are stronger going into this crisis because of regulation, and therefore we have had the flexibility so banks can lend. So be very clear: this is not an agenda for deregulation, and I hope that you hear my words and take them as they are.

Indeed, nor are they an agenda for over-bureaucratic systems, and I think what we have to do, as the Commission and the co-legislators, is work together effectively so that our regulation works and that it has an impact. The reason why we went for a quick fix is because we needed to react to the COVID-19 crisis. Indeed, some of you have rightly used this evening’s debate to talk about some of the challenges that we will face in the coming months, and they will be very difficult, and you know that before the end of this year the Commission will come forward with a communication on non-performing loans. And we do that so that we raise this issue which will face us in the coming months. We don’t know when, but we want to prepare.

So do not look on the Commission as an ally for bureaucracy or for light-touch regulation. I lived through light-touch regulation and I know it does not work. So I hope that you are convinced, those of you who had concerns about what we are doing, that this is an agenda for something that none of us wish or want, and I need to be very clear on that, and I hope that message gets through.

There were some other specific issues raised about why are we not dealing with the social-economic, why are we only dealing with these sorts of financial issues. But clearly there is a link between public health and the economy, and banks, and financial stability. You cannot separate one from the other, and I think we all know that and we need to work together on it. And particularly when you mentioned the climate crisis, as one of the colleagues did: this is integral to what we’re trying to do.

Publicly, I have said very loudly that we will not allow Covid to take our eye off the issue of addressing climate change. The challenge is greater for us, and therefore I think the challenge for our institutions is to work very effectively, so that even with the COVID-19 public health crisis, which we are not out of yet, we will legislate effectively and deal with the climate emergency, the biodiversity challenge, the environmental difficulties. We’re also looking at the social aspects of companies, not just the financial.

So I want you to be very clear today, in my first appearance in Parliament, that there will be no light-touch regulation on my watch – but there will, I hope, be effective regulation that you, as Members of this Parliament, have helped to shape. I want to thank the Committee on Economic and Monetary Affairs (ECON) for the work that they’ve done and Marcus Ferber for the work that he has done as rapporteur. The differences that are, if you like, on the floor this evening can be resolved if we listen to each other very carefully. Remember that I come from a background of the food supply chain, of agricultural markets. I fought for unfair trading practices legislation, against the wishes of some in the House, but we got there.

So please rest assured: we are in very serious times here. What we are trying to do, and we hope we will be effective, is to make sure that finance flows to SMEs, that those sectors which are currently very hit by this pandemic, who have had to open and close because of the various waves of this pandemic, will survive. And I think we are concerned that some sectors may not survive, or they will be much changed. So let me again stress why we are doing this: it is to try and ease capital flows. It is nothing else. We know that there will be a bigger review of MIFID at some time, and I value the points that have been made here, and I hope we can work together on that review and do the best for both investors and those companies who need the investment.

In my first appearance here, I think it was good to clear the air on where I stand. I hope you also heard very clearly what I intend to do. But I would ask you – and I think this will be the case: this is a different time for us all. None of us have ever lived or worked through a public health pandemic, which we are not yet clear of – the end, if you like. We hope that in 2021, vaccination will help and that, as some said, we will get back to normal. However, I don’t think we will get back to the past, and there were aspects of our normal past that we should perhaps not go back to.

So let us use what we have learned from this crisis, and indeed will continue to learn, to regulate better and effectively, and I promise you that that is my intention as the Commissioner with this responsibility. I wish I didn’t have it on my shoulders, because it will be a heavy responsibility. But if you put your shoulder with mine (socially distanced, of course), I think we can do good things, and I think we will all be proud eventually of the changes that we make. I ask you to support this report.