Whether a restart of the banking sector in the EU?
European Union finance ministers on Saturday called for creating a new authority to monitor financial stability as a first step toward overhauling the region's regulatory system.
They also broadly backed moves to share banking oversight - but officials warned of thorny negotiations ahead because it is unclear how far governments will agree to relinquish power over how banks are governed.
Finance ministers from the EU's 27 nations asked the bloc's executive, the European Commission, to outline recommendations for how Europe should deal with threats to financial stability.
The earlier focus on risks to individual banks had blinded national regulators to the causes of the credit crisis, such as the securitized debt that unraveled as investments based on U.S. subprime housing loans plunged in value.
The European Commission promised it would lay out a draft plan by mid-May for a European systemic risk council that would likely be led by the European Central Bank. EU leaders would decide on an outline in June, and rules could be tabled by the end of the year.
The ECB is the central bank for the 16 nations that share the euro currency, and both Britain and Denmark - who don't use the euro - expressed fears of the euro-zone dictating to other economies. ECB President Jean-Claude Trichet tried to calm them, saying any leading role given to the ECB would see all 27 EU nations involved in making decisions via the bank's governing council.
The EU plan calls for having an outside regulator resolve problems between regulators from a bank's home nation and host nation.
Britain said it is worried that EU plans were moving too fast, and insisted that national supervisors should always have the last word over any of their banks.
But most finance ministers are anxious to move forward with reforms to stave off financial meltdown. Governments have spent billions of euros (dollars) to shore up banks and limit future risks.
[223] 06.04.2009 Source: Associated Press
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European Union finance ministers on Saturday called for creating a new authority to monitor financial stability as a first step toward overhauling the region's regulatory system.