The European Commission will next week unveil new plans to tighten supervision of financial institutions, though the measures already face opposition from Britain, sources said Wednesday. One of the key proposals is the creation of a new Europen Systemic Risk Council (ESRC), possibly chaired by the European Central Bank and including governors from EU central banks.
Which would provide EU nations with an early warning of threats to financial stability. That body "would not have any legally binding powers," said the draft of a European Commission report seem by AFP. The paper also suggests setting up a "European System of Financial Supervisors" (ESFS), consisting of three new EU bodies with legal authority to supervise the banking, insurance and securities sectors. The ESFS would help "safeguard financial soundness" of financial firms and protect consumers, the paper said.
"The weakness of the present arrangements for macro-prudential supervision have had dramatic consequences across the global financial system," it added. The initiatives were first mooted in a report in February by a high-level group advising the EU Commission and led by Jacques de Larosiere, a former governor of the Bank of France and director of the International Monetary Fund. The European Commission report will be presented next Wednesday.
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