recommended the establishment of a body under the auspices of the European Central Bank to develop policy and provide risk warnings to European Union supervisors. It also proposed another body to co-ordinate the decentralised network of supervisors monitoring individual institutions and markets.
The FT reports that “European banking and insurance groups welcomed the conclusions”, but I don’t suppose that this in itself should lead us to reject them outright. Eurointelligence is extremely disappointed by the absence of a proposed EU-wide super-regulator, while the FT likes the proposal. Supervision and coordination of the existing supervisors, who have failed, does seem much less attractive than having one new central regulator, and so I tend to side with Eurointelligence. On the other hand, the new European supervisory structure “would combat regulatory arbitrage by: deciding compulsory minimum EU-wide standards; providing binding mediation between disagreeing national authorities; and coordinating international “colleges of supervisors”.