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Sharon welcomes next steps for European Supervisory Authorities

September 15, 2010 4:30 PM

Sharon Bowles, who chairs the European Parliament's Economic and Monetary Affairs Committee, today welcomed the presentation of two new proposals for the regulation of derivatives markets and short-selling to the Economic and Monetary Affairs Committee by Internal Market Commissioner Michel Barnier.

Sharon Bowles said:

"During the negotiation of the supervisory package the European Parliament placed great emphasis on the need for the European Supervisory Authorities to work together - to take account of the impact of their decisions in other fields.

"Commissioner Barnier's proposals will immediately put this to the test, above all in the linkage between the Securities Authority and the Banking Authority. An example of this is in the setting of capital requirements for central counterparties, the impact on banking capital of moves that may influence the liquidity of sovereign debt, and the sharing of information that may have systemic relevance.

"It is also critical that the potential of central counterparties to concentrate risk is taken into account. In practical terms this means not only rules requiring the highest possible standards for their operation, but also taking into consideration the potential for a plurality of operators, and competition between them. However, this must be done in a way that does not allow standards of risk management to become a source of competition."

The Economic and Monetary Affairs Committee will now begin the process of scrutinising the proposals and formulating a series of amendments, before negotiations begin to finalise an agreement with the European Commission and Council of Ministers.