Rules passed today which create three new European Supervisory Authorities (ESAs) and a European Systemic Risk Board (ESRB) keep national regulators at the fore whilst ensuring a common rule book to prevent future economic crises, Kay Swinburne MEP, European Conservatives and Reformists group economics spokesman, said today.
The package's adoption ends 18 months of negotiations that stemmed from the De Larosiere report prepared for the commission in 2009.
The ESAs, which will be up and running by January 2011, have the ability to mediate disputes between national supervisors, to guide national regulators, and to monitor how national authorities implement EU legislation. The ESRB will put in place a common set of indicators to permit fair and open comparisons between cross-border financial institutions and send out appropriate warnings.
Speaking after the vote, Dr Swinburne said:
"This deal ensures that cross-border markets can be supervised by cross-border institutions who coordinate the work of national regulators. It provides the markets with a common rule book and greater certainty over the key questions of who will regulate what and where.
"Instead of handing over the keys to the City of London, this deal places it in a kind of European Neighbourhood Watch programme. Peer oversight will provide us all with loudhailer warnings when there are macro systemic or particular risks.
"This package must be seen as the high-water mark of European financial supervision and not the first step towards handing over these powers to Brussels.
"With this new certainty the financial markets can begin to look to the future."