Economy and Business: Economics

Reform agenda facing the European financial system, Britain reservation

The finance ministers and central bank governors of the States of the European Union, Prague on Saturday to establish a new authority to ensure the stability of the region's financial system. But the goal found its way from the beginning strong reservations from Britain. The meeting comes in the capital of the Czech Republic - which holds the rotating presidency of the European Union - only two days after the summit of the Group of Twenty, which announced a series of actions designed to reform the financial system and international banking. The leaders pledged to develop the rules for the control of hedge funds, trust funds and the publication of a list of countries that provide havens for tax evasion would help to restore confidence in the financial system and help the global economy to recover from the effects of the financial crisis. The European finance ministers stressed their concern on Friday to speed up the implementation of the resolutions of the summit of the Group to face the twenty-related economic crisis, especially in its part on the control of the financial markets. And the fact that Britain is the largest financial market in Europe, a fierce defender of its financial sector is that the reform of financial supervision in the framework of the European Union may undermine the sovereignty, through the intervention of the supervisory authority, whether a new agency or the European Central Bank. But France and Germany want a stronger supervision of financial institutions operating across the borders of the large European Union, in order to prevent the outbreak of a new banking crisis would be swept away once again the economy of the European Union of 27. In return for the British, supported the majority of Member States of the European Union regulation of the financial sector plan developed by Jacques de ROSIERE Governor Central Bank of France before.
The Minister of Finance of the Czech Republic Miroslav Kalusk in Saturday's meeting, "We agreed on the need to strengthen the European structure of supervision. But there will be a very difficult debate on the final model to be adopted." Meanwhile, French Finance Minister Christine Lagarde: "We need to find a common front on a common solution, because we can not leave Britain out of the system, London will lead a very important role in the financial arena so as not to be left alone."
Sovereignty over the treatment of
It is proposed to do a two-tier approach ROSIERE limits of national sovereignty in the framework of the collective treatment of the chaos of financial markets: - The first through the formation of the new European leadership of the President of the European Central Bank to control the risks that could threaten the entire system and fill a major gap in the current framework. - Second, through the appointment of national securities, insurance and banking system to control the partial risk day after day. Has sought the European Central Bank President Jean-Claude Trichet to calm fears by saying that Britain's new service will include all the central banks of 27, and will not be limited to the euro area (which does not include the UK). "Trichet told reporters on the sidelines of the ministerial meeting, Prague," We are a single market rules at the State level of the 27th General Council of the European Central Bank is precisely for the 27 States. " The countries such as Slovakia and Portugal to the planned reform does not address the basic problem of sharing the burden, and the determination of the State which has a responsibility to intervene to save the Bank is working across the border from collapse.