LSE.co.uk
HomeShare PricesShare ChatFinance NewsSharecast NewsRegulatory NewsBlogsLive PricesShares BookshopFinance ToolsMembers
Latest Share Chat
Finance & Stock Market News
ECB fires ESRB warning shot at governments
Mon, 11th Jan 2010 14:23
FRANKFURT, Jan 11 (Reuters) - The European Central Bank fired a warning shot at governments on Monday, telling France to stay off the toes of Europe's new financial watchdog, the ESRB, with its own plans for a new beefed-up national regulator.
A legal opinion published by the ECB on France's Financial Regulation and Systemic Risk Council (FRSR), said it must complement the new European Systemic Risk Board (ESRB) and not stray into its territory.
'The ECB welcomes... the complementary nature of the FRSR and ESRB tasks, and particularly since it expressly provides that the FRSR will take account of the ESRB's opinions and recommendations,' the ECB said.
However, it urged France to clarify the FRSR's aims quickly to 'ensure that the role of the central bank is appropriately reflected, and that the independence of the governor of the Banque de France, as well as the quality and impartiality of his contribution as a future member of the ESRB, is not affected.'
Speaking more generally about euro-wide plans for reinforced national regulators, the ECB was even more direct in waving governments away from the ESRB's yet-to-be-finalised responsibilities.
'It is necessary to avoid such national committees being entrusted with tasks and powers that potentially conflict with those of the ESRB,' it said.
It also warned that new powers given to regulators --which in some cases may be a central bank-- should not bring independence into question.
The ESRB is expected to be formalised and start work this year as one of Europe's key weapons to prevent a re-run of the recent financial crisis.
It will sit under the wing of the ECB and be charged with giving warnings of potential dangers building in the European economy, although it will be down to governments and regulators to act upon the advice.
The ECB opinion
also waved through French plans to define a new category of covered bond, a type of bond the ECB is buying as it tries to nurse the euro zone economy back to health, while it raised question marks over Bank of France plans to give institutions with insurance arms access to its data on firms.
'The ECB stresses the need to ensure that the financial independence of the Banque de France is not endangered as the result of any liability that might arise from the disclosure of such information,' it said.
(To read legal opinion please click http://www.ecb.int/ecb/legal/pdf/en_con_2010_3_f_sign.pdf)
(Reporting by Marc Jones; editing by Stephen Nisbet) Keywords: ECB/ESRB Keywords: ECB/ESRB
(marc.jones@thomsonreuters.com; +49 (0)69 7565 1219; reuters messaging: marc.jones.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
A legal opinion published by the ECB on France's Financial Regulation and Systemic Risk Council (FRSR), said it must complement the new European Systemic Risk Board (ESRB) and not stray into its territory.
'The ECB welcomes... the complementary nature of the FRSR and ESRB tasks, and particularly since it expressly provides that the FRSR will take account of the ESRB's opinions and recommendations,' the ECB said.
However, it urged France to clarify the FRSR's aims quickly to 'ensure that the role of the central bank is appropriately reflected, and that the independence of the governor of the Banque de France, as well as the quality and impartiality of his contribution as a future member of the ESRB, is not affected.'
Speaking more generally about euro-wide plans for reinforced national regulators, the ECB was even more direct in waving governments away from the ESRB's yet-to-be-finalised responsibilities.
'It is necessary to avoid such national committees being entrusted with tasks and powers that potentially conflict with those of the ESRB,' it said.
It also warned that new powers given to regulators --which in some cases may be a central bank-- should not bring independence into question.
The ESRB is expected to be formalised and start work this year as one of Europe's key weapons to prevent a re-run of the recent financial crisis.
It will sit under the wing of the ECB and be charged with giving warnings of potential dangers building in the European economy, although it will be down to governments and regulators to act upon the advice.
The ECB opinion
'The ECB stresses the need to ensure that the financial independence of the Banque de France is not endangered as the result of any liability that might arise from the disclosure of such information,' it said.
(To read legal opinion please click http://www.ecb.int/ecb/legal/pdf/en_con_2010_3_f_sign.pdf)
(Reporting by Marc Jones; editing by Stephen Nisbet) Keywords: ECB/ESRB Keywords: ECB/ESRB
(marc.jones@thomsonreuters.com; +49 (0)69 7565 1219; reuters messaging: marc.jones.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
