European Commission: Regulating financial services for sustainable growth - a progress report
Source: European Commission
1. Introduction
The European Union is in the midst of an ambitious and intensive programme of regulatory reform in the sector of financial services in the aftermath of the financial crisis.
As soon as the crisis broke, the EU acted promptly, coordinating the European economic stimulus package to promote recovery, applying the state aid regime firmly but flexibly so as to avoid distortions of competition while allowing banks to restructure, and increasing the amounts guaranteed by Deposit Guarantee Schemes (DGSs) up to €100,000 per account.
Following this first wave of "emergency" measures, the Commission launched a programme of reforms which implements the decisions taken by the G20 and aims at tackling more structural issues in the financial sector, with four main objectives. Firstly, better regulation of the financial sector, in order to strengthen and extend the financial services rulebook and ensure an appropriate functioning of markets and institutions. Secondly, better supervision, creating a consistent and effective supervisory and control structure for financial operators and markets in Europe. Thirdly, greater consumer and investor protection in order in particular to restore confidence in the financial sector. Fourthly, the setting of appropriate mechanisms for crisis management to ensure that failing banks can be wound-up in an orderly way without costs for taxpayers nor disruptions for the financial system and the economy as a whole.
These objectives should be achieved, while at the same time fostering and deepening the single market for financial services. Efficient and integrated financial markets have indeed a decisive role to play in order to stimulate economic recovery in Europe.
The roadmap for this programme was first laid out in the Commission Communication of 4 March 2009, "Driving European Recovery", and the plans were described in detail in its Communication of 2 June 2010 "Regulating financial services for sustainable growth". These documents set out a clear, comprehensive and consistent scheme of reforms with a clear timetable and end date. Within this framework, all of our legislative proposals are based on in-depth impact assessments and public consultations, in keeping with better regulation principles. They link into the Commission's overall strategy for growth and jobs. For instance, stability of the financial sector is one of the key objectives in the Annual Growth Survey.
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