Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum
Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum
initiatives vis-à-vis ratings agencies would require closer transatlantic coordination, given that many of these firms are based in the US. The global dimension and the road ahead Regulatory and supervisory fragmentation prevents Europe from maximizing the opportunities and benefits of its global financial position. The inefficiencies resulting from fragmentation hamper the international competitiveness of European financial services. In addition, Europe’s inability to demonstrate uniformly applied supervisory standards prevents European financial companies from accessing foreign markets (such as the US) on the basis of reciprocal market opening based on mutual recognition. 24 Supervisory fragmentation also inhibits a more effective EU leadership role in global financial negotiations and governance. Institutional weaknesses inside the EU lead to missed opportunities for Europe. Weak institutional structures at a global level prevent better governance of global financial capitalism. At a global level, and in close coordination with the IMF, the Financial Stability Forum (to be expanded and renamed as the Financial Stability Board) should be put in charge of converging international financial regulation to the highest level. Globallevel governance must be pursued initially through establishing global colleges of supervisors. Europe should play a leading role in this new global financial architecture. Integrated financial supervision (ESFS) remains a necessary precondition. We have learned from past financial disruptions that major crises tend to be followed by regulatory waves, with regulation often evolving in a leapfrogging manner. 25 Major crises offer a unique opportunity for historymaking policy and regulatory interventions, though one must always guard against over-regulating. However, failing to rise to the challenge of the occasion and falling short of both what is needed and what is expected presents – under current circumstances – an even greater risk. Europe’s globalised financial system has been a source of considerable dynamism and innovation, benefiting the European economy and its position in the world. However, its governance has been left partly unresolved, with grave implications for systemic stability. Either the establishment of a European System of Financial Supervision or, as a second option, the attribution of supervisory responsibilities to the ECB, represent suitable pathways of reform. “More Europe” is needed in financial regulation and supervision, based not necessarily on centralisation but certainly on tighter coordination and integration. 42 After the crisis: A new socio-economic settlement for the EU
At the same time, well targeted regulatory interventions must seek to align the operation of the deregulated “shadow” financial sector with the interests of the real economy. Meanwhile, imposing greater transparency in the accumulation of risk; countering procyclicality in financial system functioning; aligning the interests of managers to the longer-term interest of their companies; confronting excessive risk creation and remunerations; and preventing some of the market failures that led us into the crisis, are some of the main challenges ahead. By regulating financial capitalism at home, Europe can offer a viable financial model which is exportable and potentially uploadable at global level, thus claiming the role it deserves in the governance of global capitalism. Financial reform is urgent and long-overdue, and a crisis is a terrible thing to waste. Chapter 2 – George Pagoulatos 43
- Page 1 and 2: Authors Iain Begg | Gabriel Glöckl
- Page 4 and 5: Published in 2009 by Policy Network
- Page 6 and 7: 4 After the crisis: A new socio-eco
- Page 8 and 9: 6 After the crisis: A new socio-eco
- Page 10 and 11: Simona Milio is associate director
- Page 12 and 13: Chapter 10 Simona Milio ...........
- Page 14 and 15: Before the crash: the EU as a parti
- Page 16 and 17: liberalisation. The City of London
- Page 18 and 19: of the Financial Services Action Pl
- Page 20 and 21: confidence and world trade, to whic
- Page 22 and 23: following the ECJ’s controversial
- Page 24 and 25: signals are in place to promote a n
- Page 26 and 27: need to be constructed to create ac
- Page 28 and 29: or indeed re-impose, what they rega
- Page 30 and 31: Markets with rules The overall conc
- Page 32 and 33: 30 After the crisis: A new socio-ec
- Page 34 and 35: Target financial stability The EMU
- Page 36 and 37: Belgium, the Netherlands and Luxemb
- Page 38 and 39: mortgage banks and the insurance se
- Page 40 and 41: financial market rules. The ESFS au
- Page 42 and 43: prudential regulation - though only
- Page 46 and 47: 44 After the crisis: A new socio-ec
- Page 48 and 49: Even if membership in a monetary un
- Page 50 and 51: emained relatively contained to spe
- Page 52 and 53: The second channel of functional sp
- Page 54 and 55: But even so, the depth and intensit
- Page 56 and 57: governance in the EU and the euro a
- Page 58 and 59: in the EU show, authorities at the
- Page 60 and 61: factors will remain prevalent and b
- Page 62 and 63: centralised decision-maker. Similar
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- Page 66 and 67: (GNI), the interests of the member
- Page 68 and 69: terms only very slowly and as a per
- Page 70 and 71: policy proposal asks itself what th
- Page 72 and 73: ensure that a ceiling is put on the
- Page 74 and 75: Reform of EU expenditure Spending 4
- Page 76 and 77: The medium-term financial framework
- Page 78 and 79: unanimity. The need to obtain the c
- Page 80 and 81: therefore, was weakening the Europe
- Page 82 and 83: for the signing of the strict and d
- Page 84 and 85: Since then, member states have name
- Page 86 and 87: in the world monetary system. It al
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- Page 92 and 93: Firstly, they should include policy
initiatives vis-à-vis ratings agencies would require closer transatlantic<br />
coordination, given that many of these firms are based in the US.<br />
<strong>The</strong> global dimension and the road ahead<br />
Regulatory and supervisory fragmentation prevents Europe from<br />
maximizing the opportunities and benefits of its global financial position.<br />
<strong>The</strong> inefficiencies resulting from fragmentation hamper the international<br />
competitiveness of European financial services. In addition, Europe’s<br />
inability to demonstrate uniformly applied supervisory standards prevents<br />
European financial companies from accessing foreign markets (such as<br />
the US) on the basis of reciprocal market opening based on mutual<br />
recognition. 24 Supervisory fragmentation also inhibits a more effective EU<br />
leadership role in global financial negotiations and governance.<br />
Institutional weaknesses inside the EU lead to missed opportunities for<br />
Europe. Weak institutional structures at a global level prevent better<br />
governance of global financial capitalism. At a global level, and in close<br />
coordination with the IMF, the Financial Stability Forum (to be expanded<br />
and renamed as the Financial Stability Board) should be put in charge of<br />
converging international financial regulation to the highest level. Globallevel<br />
governance must be pursued initially through establishing global<br />
colleges of supervisors. Europe should play a leading role in this new<br />
global financial architecture. Integrated financial supervision (ESFS)<br />
remains a necessary precondition.<br />
We have learned from past financial disruptions that major crises tend to<br />
be followed by regulatory waves, with regulation often evolving in a<br />
leapfrogging manner. 25 Major crises offer a unique opportunity for historymaking<br />
policy and regulatory interventions, though one must always<br />
guard against over-regulating. However, failing to rise to the challenge of<br />
the occasion and falling short of both what is needed and what is expected<br />
presents – under current circumstances – an even greater risk.<br />
Europe’s globalised financial system has been a source of considerable<br />
dynamism and innovation, benefiting the European economy and its<br />
position in the world. However, its governance has been left partly<br />
unresolved, with grave implications for systemic stability. Either the<br />
establishment of a European System of Financial Supervision or, as a<br />
second option, the attribution of supervisory responsibilities to the ECB,<br />
represent suitable pathways of reform. “More Europe” is needed in<br />
financial regulation and supervision, based not necessarily on centralisation<br />
but certainly on tighter coordination and integration.<br />
42<br />
After the crisis: A new socio-economic settlement for the EU
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