EU agrees financial supervision overhaul

3 September 2010

EU regulators have reached a landmark accord that will change the way financial supervision takes place in the bloc.

From the beginning of 2011, new supervisory authorities will oversee the banking, insurance and securities industries, with regulators granted the power to investigate financial products and activities and temporarily ban them if necessary.

A new systemic risk watchdog will also be created to issue government warnings on potential economic risks, reports Bloomberg.

It will be headed by the president of the European Central Bank, who is currently Jean-Claude Trichet.

Meanwhile, credit ratings agencies will come under scrutiny from the European Securities and Markets Authority.

Michel Barnier, financial services commissioner for the EU, said: "We have reached a crucial milestone.

"We will have the control tower and the radar screens needed to identify risks."

In July, Mr Trichet called for the rest of the international community to follow Europe's lead in embarking on deficit reduction programmes that cut public spending and raise taxes, reported the Financial Times.

By Claire Archer

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development