NEWS

Finance ministers from the 27 countries that comprise the European Union agreed on December 2 to create four new pan-European regulators overseeing financial markets and institutions. One entity will oversee banking (based in London), another securities (Paris), a third insurance (Frankfurt), and a fourth financial risks. The EU Parlement must approve the framework.

As the Financial Times reports, “the three new European supervisory authorities will not handle day-to-day supervision of individual financial institutions, a role that will remain with national watchdogs. But they will have the task of coordinating the actions of national supervisors, have direct supervisory powers over credit rating agencies, and work towards a ‘common rulebook’ for all EU financial institutions.

“The new authorities will not be able to take decisions that impinge on national budgets, or so-called fiscal sovereignty. Further safeguards have been agreed to buttress this broad prohibition.”