Commissie financiële experts adviseert vvor oprichting Europees agentschap voor analyseren risico's in financiële systeem (en)
EUOBSERVER / BRUSSELS - A high-level group of financial experts headed by former IMF managing director Jacques de Larosiere has called for a new European agency to gather information on the risks faced by the EU financial system.
The new body, to be called the European Systemic Risk Council (ESRC), would provide early risk warnings and operate under the auspices of the European Central Bank (ECB), says the group's report published on Wednesday (25 February).
"The ESRC should pool and analyse all information relevant for financial stability," the document suggests in one of its 30 recommendations.
If adopted by finance ministers, the new body will be chaired by the ECB president and contain one representative from the European commission.
Mr Larosiere attacked warnings issued by a number of organizations prior to the financial crisis as "very frequently lacking anything concrete."
Regarding the regulation of individual banks, the report suggests increasing the powers of the existing supervisory committees rather than creating a single EU body that many had called for.
"Before calling for such ambitious projects you have to think things through," said Mr Larosiere.
"We are not opting for super-structures which I think would have had little prospect of being accepted."
Instead the existing banking regulatory bodies, known as level three committees, would gain new legal powers to ensure better coordination between national regulators and the adoption of supervisory standards.
They would also gain powers to issue licences to credit-rating agencies, licences that can be revoked following poor performance by the agency.
The failure of credit rating agencies to accurately assess the risk attached to certain financial products, such as securitized sub-prime mortgages, has been criticised as an important contributor to the current crisis.
Dutch socialist MEP Ieke van den Burg, a member of the influential Economic and Monetary Affairs committee in the European Parliament, broadly welcomed the document.
"It is very similar to what we did in the parliament so I am very proud that we have come to the same conclusions," she told EUobserver.
She was also impressed that the group of financial experts from diverse backgrounds managed to agree unanimously on the final text.
"It is a good example for the council [representing member states] to get their act together and support this report," she said.
"I hope the summit of EU leaders [on 1 March] will give a clear signal about this and not leave it only to finance ministers."
Guidelines on impaired assets
The commission also presented a list of guidelines for member states regarding impaired assets on Wednesday.
Impaired assets, also know as "toxic assets," have been blamed for undermining confidence in the financial system, as they create uncertainty about the stability of individual banks holding them.
The commission guidelines are designed to allay fears that member states' schemes to deal with such assets could have negative effects on other EU countries' economies or constitute a form of financial protectionism.
Under the guidelines, assets would be valued by independent experts and valued at their real economic value rather than current market prices.
Likewise, the cost of member state schemes should be shared between all stakeholders and not just shouldered by the taxpayer.
"If finance ministers are not pleased with these guidelines, then I really don't know what they are asking for," said competition commissioner Neelie Kroes.
Finance ministers will next meet in Brussels on 10 March.